Brent crude falls below $100 as Iran signals Hormuz reopening

Brent crude dropped below $98 per barrel on Tuesday, falling to a two-week low as Iran signaled a conditional willingness to reopen the Strait of Hormuz and Saudi Arabia restarted its damaged East-West Pipeline, easing fears of prolonged supply disruptions that have kept energy prices elevated since late February.

The decline marked the fifth consecutive day of losses for crude benchmarks. November Brent futures fell about 2% to $98.33 a barrel, while the November West Texas Intermediate contract dropped roughly 2.7% to near $90 a barrel, according to the Associated Press. All three major crude contracts touched their lowest levels since September 8.bnnbloomberg+1

Iran's Conditional Offer

A senior Iranian official said Tuesday that Tehran could reopen the strategic waterway within seven days if the United States eases military pressure and lifts its blockade on Iranian ports, Reuters reported. Iran's delegation attending the United Nations General Assembly in New York has authority to pursue diplomatic engagement with the United States, the official added.stl+1

The offer follows earlier, harder-line statements from Iranian officials. Iran's parliament speaker Mohammad Baqer Ghalibaf said over the weekend that the strait would remain closed until Tehran's conditions were met. The conditional nature of Tuesday's signal — no agreement has been announced — leaves open the possibility that oil flows could remain restricted.news.sky

Before U.S.-Israeli attacks on Iran began in late February, approximately one-fifth of global oil and liquefied natural gas supplies moved through the Strait of Hormuz.stl

Saudi Pipeline Restart Adds Supply Relief

Saudi Arabia provided a second catalyst for the selloff. Reuters reported that the kingdom restarted operations on its East-West Pipeline and could resume exports from the Red Sea port of Yanbu, though sources said the pipeline was operating at a low rate. The pipeline was shut after drone strikes launched from Iraqi territory damaged the 1,200-kilometer conduit on September 10-11.wtvbam+3

Tanker-tracking data cited by Reuters showed approximately 14 million barrels of Saudi crude were loaded onto seven supertankers inside the Gulf on Sunday.stl

Markets React, but Risks Remain

The retreat in oil pulled Treasury yields lower, with the 10-year yield easing to around 4.93% after breaching 5% last week for the first time since 2023. That combination lifted equities: the S&P 500 rose 0.2% in early trading, pulling within reach of its all-time high, while the Nasdaq Composite added 0.4%.couriernews+1

Despite the relief, oil remains far above the roughly $72 per barrel Brent was fetching earlier this summer. Ole Hansen, head of commodity strategy at Saxo Bank, told Reuters that further downside could be difficult without increased flows through the Strait of Hormuz, particularly for refined petroleum products. Diesel prices in Europe and the United States have climbed to record levels as the conflicts involving Iran and Ukraine disrupted exports from major producers.stl

The geopolitical backdrop remains in flux. Chinese leader Xi Jinping is set to arrive in Washington on Wednesday for a state visit with President Donald Trump, where competition over AI technology, trade and the Iran conflict are expected to dominate discussions.bnnbloomberg+1