Global oil price drops below $100 per barrel

Global oil prices fell on Wednesday (September 23) as expectations of increased Middle Eastern supplies and hopes for renewed US-Iran diplomacy eased concerns over prolonged supply disruptions.

Brent crude futures fell 78 cents, or 0.79 per cent, to $98.47 a barrel, while West Texas Intermediate (WTI) crude dropped $1.21, or 1.34 per cent, to $89.31 as of 0651 GMT, according to Reuters.

The decline came after Saudi Arabia restarted its East-West oil pipeline, which had been shut following a drone attack on September 11.

The pipeline resumed operations at a reduced rate and provides an alternative route for moving Saudi crude from the kingdom’s eastern fields to the Red Sea port of Yanbu, bypassing the Strait of Hormuz.

However, full restoration of its 7 million-barrel-a-day capacity could take several weeks.

Markets also took some comfort from signs of possible diplomatic engagement between Washington and Tehran during the UN General Assembly in New York.

An Iranian official said Tehran could consider reopening the Strait of Hormuz within seven days if the United States eases military pressure and lifts its blockade of Iranian ports.

Shipping through the strategic waterway, however, remains disrupted.

Brent had already settled below $100 a barrel on Tuesday as Saudi oil flows improved and hopes for greater shipping through the Gulf grew. The benchmark fell $1.09, or 1.09 per cent, to $99.25 a barrel, while the expiring October WTI contract ended at $94.99, down $1.19, or 1.24 per cent.

Despite the recent decline, the market remains highly volatile as traders weigh recovering supply against continuing geopolitical and shipping risks in the Middle East.