Oil prices fell to their lowest level in nearly two weeks on Tuesday after Saudi Arabia restarted a pipeline that lets it route crude around the Strait of Hormuz and a senior Iranian official signaled Tehran could reopen the strait itself within days. Brent crude slid more than 2% toward $98 a barrel, while West Texas Intermediate dropped near $89, both retreating from levels above $100 that had held for much of the past two weeks.
Saudi Arabia's state oil giant restarted the East-West Pipeline, which normally carries about 4 million barrels a day, roughly 4% of global supply, from the country's eastern oil fields to the Red Sea export terminal at Yanbu. The line had been shut since Sept. 13, after drone strikes disabled pumping stations feeding the terminal. Flows resumed at reduced capacity, and people familiar with the restart said returning the line to full throughput could take weeks.
Separately, a senior Iranian official told Reuters that Tehran was prepared to reopen the Strait of Hormuz within a week if the United States eased its military pressure and lifted its blockade of Iranian ports, and said Iran had submitted a diplomatic proposal to Washington through intermediaries.
A war that rewired the world's busiest oil chokepoint
The offer is the clearest sign yet of a potential thaw in a conflict that has disrupted global energy markets since Iran closed the strait after fighting broke out on Feb. 28. Hormuz normally carries about a quarter of the world's seaborne oil trade and a fifth of its liquefied natural gas. Washington responded with a naval blockade of the Iranian coastline that began April 13, was briefly lifted after a short-lived peace deal in June, and was reimposed on July 14; the Pentagon has estimated the blockade cost Iran roughly $4.8 billion in lost oil revenue by early May alone. Even with diplomacy advancing, actual traffic through the strait remains a fraction of normal: only two commercial vessels transited on Monday, versus about 125 a day before the war.
The price relief has limits, analysts cautioned.
Brent at $100 and diesel at $6.50 a gallon are already squeezing consumers.
Claudio Galimberti, chief economist, Rystad Energy
Galimberti added that the bigger question for the global economy is whether the energy shock becomes a drag on growth even as it feeds inflation. That tension was underscored Tuesday when President Trump, speaking at the United Nations, floated banning U.S. diesel exports to keep more fuel at home, a step that, if enacted, could cushion American drivers even as it removes barrels from an already tight global diesel market.
Traders are now watching for confirmation that Saudi Arabia's Yanbu terminal is loading cargoes again, any formal U.S.-Iran talks following Trump's UN remarks, and whether Monday's uptick in Hormuz shipping traffic proves durable.