BY COMFORT OGBONNA
Oil prices fell about 1% on Thursday as recovering crude exports from the Gulf region and an unexpected increase in U.S. inventories eased concerns about supply shortages, while investors monitored renewed diplomatic efforts between the United States and Iran aimed at ending their conflict in the Middle East.
Brent crude futures fell 1.1% to $96.92 a barrel by 0420 GMT, while U.S. West Texas Intermediate crude declined 1.4% to $89.18 a barrel.
Both benchmarks had gained about $1 a barrel on Wednesday. Despite Thursday’s decline, oil prices posted strong monthly gains in September, with Brent rising about 14%, its largest monthly increase since July. WTI gained roughly 5% during the month.
The recent decline reflects signs that crude supplies are recovering from disruptions that had tightened the market and pushed prices higher.
Saudi Arabia has resumed oil tanker loadings from Yanbu following the restart of operations on its East-West Pipeline. The restoration of the pipeline and renewed shipments have helped reduce concerns about the availability of crude from the Gulf.
U.S. inventory data also added pressure to prices. Commercial crude inventories in the United States increased by 922,000 barrels to 427.3 million barrels in the week ended Sept. 25, according to the Energy Information Administration.
The increase came as a surprise to the market. Analysts had expected U.S. crude inventories to decline by about 264,000 barrels.
The larger-than-expected build suggested that domestic crude supplies were more comfortable than anticipated, adding to the factors weighing on prices.
Investors were also assessing developments in U.S.-Iran diplomatic efforts. Iran said Wednesday that it had received a U.S. response to its latest proposal aimed at reviving a ceasefire arrangement in the Gulf.
Any progress toward an agreement could reduce concerns about further disruptions to oil supplies from the region, although uncertainty remains over whether the diplomatic efforts will result in a lasting settlement.
U.S. President Donald Trump denied reports that he was prepared to offer Iran sanctions relief and release frozen Iranian funds in exchange for specific actions by Tehran regarding its nuclear program.
The possibility of reduced geopolitical tensions has contributed to a decline in the premium investors had placed on oil because of the conflict. However, the Middle East remains a major source of global crude supplies, meaning developments involving Iran and other Gulf producers continue to influence prices.
Oil exports from the Gulf have also shown signs of recovering. Goldman Sachs estimated that total Gulf oil exports, including shipments sometimes referred to as “dark exports” involving vessels that disable their location transponders, had recovered to about 23.3 million barrels per day during the latest week.
That level was broadly in line with the region’s 2025 average, while Gulf exports had doubled during September, according to the investment bank.
The recovery in shipments could provide additional relief to a market that had been concerned about prolonged disruptions caused by the conflict.
Attention is also turning to the next meeting of OPEC+, where major oil-producing countries are expected to discuss production targets for November.
Sources familiar with the discussions said the group is likely to keep its production targets unchanged when it meets Sunday. Maintaining existing targets would leave the market focused on actual production levels and the pace at which disrupted supplies return.
The combination of recovering Gulf exports, higher U.S. inventories and the possibility of progress in U.S.-Iran diplomacy has reduced some of the immediate supply concerns that helped push oil sharply higher in September.
However, traders remain focused on the Middle East conflict, OPEC+ production decisions and the strength of global demand as they assess the outlook for crude prices in the coming weeks.
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