Oil’s Early Rebound Fades as Saudi Flows Improve

Oil prices bounced early on Tuesday, September 22, with Brent up 1.3% at $101.59 a barrel and U.S. crude up 0.7% at $96.45. The gains did not hold: Brent settled at $99.25, down 1.09%, while expiring October WTI finished at $94.99, down 1.24%.

The early rise came after four straight sessions of losses. On Monday, Brent fell 3.4% and WTI dropped 4.5%, leaving both at their lowest closing prices since September 9. A Reuters-cited analyst described Tuesday’s initial move as a short-covering bounce, as traders who had bet on further declines reduced those positions.

Diplomacy offered a reason to reassess the risk of supply disruptions. A senior Iranian official told Reuters that Tehran could reopen the Strait of Hormuz within seven days if Washington eased military pressure and lifted its blockade of Iranian ports. Iran’s delegation at the United Nations General Assembly had authority to resume talks, but no direct meeting between the two presidents was planned.

Saudi supply also looked less constrained. Satellite and ship-tracking data cited by Reuters put Saudi crude flows through Hormuz at about 2.9 million barrels a day over six days, up from roughly 700,000 in August. The East-West pipeline, a key route to the Red Sea that had been shut after attacks, restarted operations; exports from Yanbu could resume at reduced volumes.

Those developments weighed on prices as Tuesday progressed. Brent briefly fell below $98, and traders faced the prospect of more Gulf crude reaching buyers even as the Strait remained a major uncertainty. Before the war, about one-fifth of global oil and liquefied natural gas supplies moved through Hormuz.

The next signals are whether Saudi shipments keep rising and whether Washington and Tehran move beyond conditional statements. A diplomatic opening could ease fears of prolonged disruption, but the day’s lower settlement showed that an early rebound alone did not erase the market’s concern about additional supply.