West Texas Intermediate (WTI) crude oil prices fell to around $89.10 per barrel during Asian trading hours on Thursday, reversing modest gains from the previous day as investors responded to signs of recovering Middle East oil shipments and ongoing geopolitical uncertainty between the United States and Iran [1]. The decline in prices was driven by the restoration of half the capacity of Saudi Arabia's East-West pipeline, which contributed to regional crude shipments nearing pre-war levels and increased flows through the Strait of Hormuz to 13.2 million barrels per day [1].
Despite the recovery in shipments, market participants remain cautious about the sustainability of these flows, given the lack of a lasting agreement to end the conflict, and both Tehran and Washington asserting control over the strategic Strait of Hormuz [1]. Iranian spokesperson Fatemeh Mohajerani confirmed that Tehran had received a U.S. proposal regarding the reopening of the strait, while OPEC+ is expected to keep November output quotas unchanged at its upcoming weekend meeting [1].
On the supply side, analysts at Deutsche Bank highlighted that the United States announced it would offer up to 40 million barrels from its Strategic Petroleum Reserve, marking the final drawdown in the coordinated global release of oil announced earlier in the year [1]. This additional supply contributed to a notable intraday turnaround in oil prices, although the market remained under pressure by the close [1]. Brent crude settled 2.59% lower, while WTI crude saw a larger decline of 3.48%, reaching a four-week low of $89.48 per barrel. The spread between the two benchmarks widened as the current front-month Brent future expired [1].
CONCLUSION
WTI crude oil prices experienced a significant decline, driven by the recovery of Middle East oil shipments and the release of additional U.S. strategic reserves. While the immediate supply outlook has improved, market sentiment remains cautious due to ongoing geopolitical risks and uncertainty over the durability of the recovery. The market impact is high, with both benchmarks posting notable losses.