Crude oil slipped below $89 per barrel on Wednesday, its lowest level in more than a month, extending a 16% decline from September’s four-month high as signs pointed to reduced supply risks in the Middle East. Saudi Arabia lowered the official selling price of its flagship crude to $5 below the regional benchmark, while tankers were able to leave the Persian Gulf fully loaded. Evidence of rising export volumes from regional OPEC+ producers also emerged alongside reports that US and Iranian officials were holding talks with regional authorities this week.
Supply concerns eased further after Saudi Arabia reported that its East-West pipeline was running at full capacity, redirecting up to 5.8 million bpd of crude to the Red Sea. However, shipping costs remained elevated amid reports of strikes on vessels transiting the Strait of Hormuz. In the US, EIA data showed crude inventories declined by more than 3 million barrels last week, while the Strategic Petroleum Reserve remained near multi-decade lows.