Oil prices dropped as Brent crude fell toward $97 a barrel following the restart of Saudi Arabia's East-West pipeline and easing supply fears near the Strait of Hormuz. Despite falling crude prices, U.S. diesel surged to a record $6.53 per gallon as the administration considers export limits. Meanwhile, South Korea announced long-term plans to halve its dependence on Middle East crude by 2035.
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Oil Prices Surge Above $3 Following Middle East Escalation and Supply Concerns
Oil prices retreated to a two-week low on Tuesday as improving supply prospects from the Gulf eased market anxiety following disruptions to Saudi export infrastructure. The November contract fell $2.01, or 2 per cent, to $98.33 a , while the October contract lost $2.50, or 2.61 per cent, to $93.28 a barrel. Prices pulled back as Iran signaled it could reopen the Strait of Hormuz within seven days if the United States lifts its blockade, and Saudi Arabia moved to resume operations at its East-West Pipeline and Red Sea port of Yanbu. The pipeline closure had previously driven to a 3.75-month high after drone strikes halted flows across the 750-mile conduit. Total Middle East oil flows averaged 17 million barrels per day over the preceding 10 days, remaining roughly 6 million bpd below the 2025 average. Meanwhile, diesel prices in Europe and the United States have rallied to record highs amid sharp export cuts from Russia, Saudi Arabia, and the United Arab Emirates.
Oil Futures Settlement Prices ($)
Brent and WTI contracts fell by over 2 percent during Tuesday's session
Bridge Green and Hartree Sign $1 Billion Lithium Carbonate Supply Agreement
Bridge Green Upcycle and Hartree Partners signed an eight-year commercial agreement for the purchase and marketing of recycled lithium carbonate valued between $500 million and $1 billion. Under the terms, Hartree receives exclusive rights to market approximately 10,000 tonnes per annum of lithium carbonate across all grades from Bridge Green facilities. The agreement includes an to renew for an additional seven years. Alongside the supply arrangement, Hartree made an investment in Bridge Green as part of the company bridge financing round. Initial volumes of lithium carbonate for Hartree are anticipated in 2028. Bridge Green earlier commissioned its Circularity Center India with a nameplate capacity of around 7,200 tonnes per annum of lithium-ion battery input, and upcoming Series A funding is expected to finance integrated refining facilities in India and the US.
South Korea Plans to Reduce Middle East Crude Oil Import Reliance to 50% by 2035
South Korea aims to reduce its reliance on Middle Eastern to 50 per cent by 2035, according to channelnewsasia.com. The Industry Ministry released a 10-year natural resources security plan on Wednesday, seeking to energy supplies after the Iran war disrupted global flows. South Korea sourced 70 per cent of its crude oil from the Middle East in 2025, largely routed through the Strait of Hormuz. The updated strategy includes expanding crude oil stockpiles by roughly 20 million barrels by 2030. The country also targets securing additional supplies of condensate to ease shortages of naphtha, a key petrochemical feedstock. South Korea imports about 45 per cent of its naphtha demand, with 77 per cent of those imports historically coming from the Middle East. For , the government plans to cap Middle East import dependence below 30 per cent by 2035, following a level of 20 per cent in 2025. Additionally, the strategy expands the critical minerals list from 38 to 51, incorporating 10 rare earths and germanium to secure supply chains.
Middle East Import Reliance (%)
Crude reliance is targeted to fall 20 points by 2035.
Poland's Orlen Partners With Naftogaz to Supply LNG and Fuel to Ukraine
Polish energy group Orlen will supply Ukraine with three cargoes of in the first quarter of 2027 under new agreements signed with state-owned Naftogaz. The arrangement bolsters fuel supplies as Ukraine braces for a difficult heating season following sustained attacks on its domestic energy infrastructure. In addition to the deliveries, Orlen subsidiary Ukrnafta will receive motor fuel worth up to $500 million to stabilize domestic markets. Retail prices for motor fuel in Ukraine have climbed by 8% to 10% since the start of the month, with diesel nearing 100 hryvnias, or $2.24, per litre amid disruptions linked to conflict in the Middle East. Ukraine relies entirely on imported fuel after Russian missile strikes destroyed its domestic refining capacity. The agreements also allow Ukrnafta to explore refining its own domestic output at facilities in Central Europe. Before the invasion in 2022, Ukraine produced approximately 1.5 million metric tons of crude and gas condensates annually.
Saudi Arabia has restarted operations at its East-West Pipeline and could resume exports from the Red Sea port of Yanbu later on Tuesday. The resumption of supplies on Tuesday helped to drive selling on global oil markets, pushing global oil down by more than $2 a towards $97, its lowest since September 8. Drone attacks forced the kingdom to shut the pipeline, halting loadings at Yanbu port. State oil firm Saudi Aramco has been using the pipeline to reroute around 4 million barrels per day, representing around 4% of global supply, to Yanbu since disruption to oil flows through the Strait of Hormuz following the war on Iran. The pipeline was pumping at a low rate after its restart, and Aramco is seeking to get the pumping rate back to 4 million bpd against a total capacity of 7 million bpd. A security source said that reaching a rate of 40% of capacity will take a couple of days and a full restart will take 6 to 8 weeks, while a separate oil industry source said a return to full pumping rates would take up to six weeks. Three pumping stations serving the pipeline were damaged in the drone attack out of 11 pumping stations and two separate pressure relief stations. Traders are preparing for Saudi oil loadings by moving tankers to Egypt's Mediterranean Port Said for ship-to-ship transfers and also to Sidi Kerir.
Treasury Secretary Says Trump Administration Examining Feasibility of Diesel Export Ban
cnbc.com reports that the Trump administration is examining the feasibility of a diesel export ban to combat record high fuel prices. Secretary Scott Bessent stated on Tuesday that officials are evaluating whether a full or partial ban would work within current refining capacity constraints. President Donald Trump indicated that a decision will be made quickly. The policy proposal comes as U.S. diesel has surged to a record high of $6.53 per gallon, representing an increase of $2.84 compared to the same period last year according to AAA data. In California, diesel prices have reached $8.44 per gallon. Republican lawmakers including Senator Chuck Grassley of Iowa have pushed for the ban to protect farmers and truckers ahead of the November midterm elections. Global refining capacity has been constrained by attacks on Russian refineries from Ukraine and Middle Eastern facilities targeted by Iran, alongside shipping disruptions through the Strait of Hormuz. U.S. refiners have increased exports to capture elevated profit margins.
Strait of Hormuz Shipping Traffic Drops as Saudi Oil Flows Increase
A dozen vessels transited the Strait of Hormuz over the weekend, falling from 35 the prior weekend as regional tensions persist. Before the conflict began on February 28, the strait typically handled about 125 large commercial vessels per day. Middle Eastern producers continue to export oil on tankers travelling with their transponders off to avoid detection. Saudi Arabia increased exports through the strait this month and next after Houthi attacks on Saudi Aramco's East-West pipeline halted shipments via Yanbu. Those shipments enabled Saudi exports to recover to over 4 million barrels per day in September after slumping to 2.4 million barrels per day in August, the lowest since at least 2013. Satellite data indicated Saudi oil moving through the Strait of Hormuz averaged 2.9 million barrels per day over the past six days, up from 700,000 barrels per day in August. Total oil flows averaged 17.1 million barrels per day in the past 10 days, according to JPMorgan analysts, sitting 6.1 million barrels per day below the 2025 average.
Supply shifts and pipeline restarts are pressuring crude prices downward, even as refined product costs hit historic highs. Whether potential U.S. fuel export restrictions will further distort global energy markets stays unresolved.
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