Oil prices fell as the impact of Saudi Arabia ramping up crude supply through a critical pipeline outweighed market concerns over the U.S.-Iran standoff.
Brent declined, settling below $103 a barrel. After a prior drone attack, Saudi Arabia's east-west oil pipeline is reported to have restored roughly half of its transport capacity.
Despite persistent shipping risks, crude appears to be flowing steadily out of the Persian Gulf through the Strait of Hormuz via vessels employing covert navigation methods.
The Trump administration is releasing up to 40 million barrels of oil from the Strategic Petroleum Reserve, adding further pressure on prices.
Rebecca Babin, a senior energy trader at CIBC Private Wealth Group, said: "Increased oil flows through the Strait of Hormuz, combined with the restart of Saudi Arabia's east-west pipeline, are bringing some supply relief to the market."
Although November-delivery Brent remained above $100 a barrel, that contract is set to expire on Wednesday, while the more actively traded December futures settled at around $96.
As the conflict enters its eighth month, U.S.-Iran talks held in New York last week made little progress. A Qatari Foreign Ministry spokesperson said on Tuesday that Qatar is holding talks with both the United States and Iran and exchanging views on possible solutions.
Despite supply disruptions caused by the Iran war, Persian Gulf oil-producing nations have been seeking ways to keep the market supplied. Oman plans to more than double the oil storage capacity at a port outside the Strait of Hormuz, leveraging its strategic location.
November-delivery WTI fell 3.5% to settle at $89.38 a barrel; November-delivery Brent dropped 2.6% to settle at $102.59 a barrel; the more active December contract declined 1.7% to settle at $96.16 a barrel.
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