Oil prices fell again on Tuesday as improving Saudi crude flows eased some of the market’s supply concerns, although prices recovered from their session lows after hopes for an immediate U.S.-Iran agreement faded. Brent crude futures for November settled at $99.25 a barrel, down $1.09, or 1.09%, while WTI for October settled at $94.59, down $1.19, or 1.24%.

Both benchmarks were down more than $2 a barrel at their session lows before recovering. The market had been encouraged by the possibility of diplomatic progress during this week’s United Nations General Assembly, but those expectations weakened after President Trump said a peace agreement would come after the U.S. midterm elections.

The biggest change in the physical oil market is the improvement in Saudi exports. Saudi Arabia has restarted its East-West pipeline, which was shut down after drone attacks on September 13. The restart could allow crude exports from the Red Sea port of Yanbu to resume.

Saudi oil is also moving through the Strait of Hormuz at a higher rate. Tracker and satellite data show Saudi crude flows through the strait averaging approximately 2.9 million barrels per day over the past six days, compared with roughly 700,000 barrels per day in August. Aramco also loaded approximately 14 million barrels onto seven VLCCs inside the Gulf.

Iran has indicated that the Strait of Hormuz could potentially reopen within seven days if the U.S. reduces military pressure and lifts its blockade of Iranian ports. An Iranian official also said the country’s delegation at the UN has authority to resume diplomatic discussions with the United States.

Before the war began in late February, approximately 20% of global oil and LNG supplies moved through the Strait of Hormuz. Any sustained increase in traffic through the waterway would therefore have a significant impact on the current supply situation.

The physical market remains particularly tight for refined products. Diesel prices in the U.S. and Europe have reached record levels as the conflicts involving Iran and Ukraine have disrupted exports from major suppliers including Russia, Saudi Arabia and the United Arab Emirates.

For now, the market is watching two developments closely: how quickly Saudi exports can return following the pipeline restart, and whether crude and refined-product flows through the Strait of Hormuz continue to improve.

• Where: Loews Arlington Hotel
• Attending: Brian Baker (239.297.4519), David Cohen (954-729-4774), and Curtis Chandler (239-405-3365)
• Conference Website

• Where: The Westin Galleria Dallas
• Attending: David Cohen (954-729-4774), and Curtis Chandler (239-405-3365)
• Conference Website

• Where: The Westin Galleria Dallas
• Attending: Brian Baker (239.297.4519)
• Conference Website