Oil prices extended gains on Tuesday, with Brent crude hovering near $107 a barrel and West Texas Intermediate approaching $94, even as Middle East exports recovered to their strongest level since February. The apparent contradiction underscores the market's central question: why does a rebound in supply not ease prices?
Export recovery is real but normality is still far away
Preliminary data from Kpler indicate that exports from key regional producers reached approximately 12.8 million barrels per day in September, supported by stronger shipments from Saudi Arabia and the UAE. However, this remains about 6 million barrels per day below February's 18.8 million, as the US-Iran conflict continues to disrupt shipping, insurance, and routing through the Gulf.
Saudi Arabia has driven much of the rebound. Kpler estimates the kingdom's September exports at about 5.4 million barrels per day, more than double August's level, while flows through the Strait of Hormuz are expected to average about 7.4 million barrels per day. Saudi Aramco has also restarted exports through the repaired East-West pipeline to the Red Sea port of Yanbu, restoring an important route that bypasses Hormuz.
Yet the pipeline is operating below its previous capacity, and parts of the regional logistics network remain vulnerable to attacks and disruption. Tim Waterer, chief analyst at KCM Trade, noted that higher export volumes still depend heavily on costly workarounds, including ship-to-ship transfers. In his view, the recovery does not represent a return to normal market conditions.
Brent is pricing the risk around every barrel
Brent futures rose about 1.4% to $106.77 a barrel in Asian trade, while WTI gained 1.5% to $93.94. Both benchmarks also finished higher on Monday after President Donald Trump rejected an Iranian proposal linked to reopening the Strait of Hormuz. US and Iranian officials have continued exchanging messages through mediators, but the gap between the two sides remains wide.
Sally Auld, chief economist at NAB, told The Wall Street Journal that Washington and Tehran remain far apart on the terms of a ceasefire and the reopening of the strait. That uncertainty matters because Hormuz normally handles about one-fifth of the world's daily crude oil and LNG supply. Even if more barrels are moving, traders still have to price the possibility that flows could fall sharply again.
Next move depends on diplomacy and durable supply
The return of Saudi exports through Yanbu has already shown how sensitive prices are to signs of improving logistics. News of the pipeline restart pushed Brent back from around $107 to near $105 on Monday before geopolitical concerns lifted prices again. The market is therefore separating physical supply from supply security.
More crude is leaving the region, but it is moving through a system that remains more expensive, less efficient, and more vulnerable than before the war. That helps explain why a seven-month export high has not driven Brent back below $100. The recovery has reduced the risk of an immediate shortage, but it has not removed the geopolitical premium.
This article is for informational purposes only and does not constitute financial advice.
