Brent Crude Falls Below $100 as Saudi Pipeline Restarts and Iran Offers to Reopen Hormuz Within a Week

Oil prices tumbled roughly 3 percent on Tuesday, pushing Brent crude below $100 a barrel for the first time since the U.S.-Iran conflict began, after two simultaneous supply-side developments broke in quick succession. Saudi Arabia restarted its East-West onshore pipeline, which had been shut since September 10 drone attacks, and trade sources said the kingdom was preparing to resume crude exports from the Yanbu port on the Red Sea later in the day, with full pipeline flows expected to be restored by the end of the week. Saudi Aramco officials had already informally told at least three Asian refiners that they would soon be able to lift cargoes at Yanbu, the kingdom's key terminal that bypasses the Strait of Hormuz.

Separately, a senior Iranian government official told Japan's Kyodo News that Tehran was prepared to open the Strait of Hormuz within seven days, provided the United States takes steps to ease pressure, including ending its military blockade of Iranian ports and halting military operations in the Strait. The same Kyodo report noted that Iran's economic difficulties are deepening as the country is unable to export crude oil, a pillar of its national revenue, and that opinions within the Iranian leadership are shifting toward resuming negotiations with Washington as soon as possible, with conditions for restarting talks potentially being eased depending on the U.S. response.

Brent had been trading near $108 a barrel early last week before Saudi Arabia shut the East-West pipeline, then fell to around $100 on Friday and Monday as higher-than-expected Saudi shipments through Hormuz eased the initial supply scare. Tuesday's dual developments accelerated that retreat, with Brent touching $98 a barrel intraday and putting oil on course for its fifth consecutive daily decline, its longest losing streak since the conflict began. ING Bank analysts cautioned that supply-side risks remain elevated despite the pullback.

Falling oil prices rippled through financial markets. U.S. equity futures turned higher pre-bell, with the Nasdaq leading gains as the inverse relationship between energy costs and technology stocks reasserted itself. Goldman Sachs noted that prices for refined products including diesel, gasoline, and jet fuel have risen substantially since the start of the war but said its strategists expect them to decline over the rest of the year. Separately, JODI data showed Saudi crude and refined product exports rose to 5.247 million barrels per day in July from 5.021 million bpd in June, while Saudi crude inventories climbed to 175.635 million barrels in July from 144.210 million barrels in June.