WTI rebounds as Hormuz risks temper relief from rising Gulf exports

West Texas Intermediate (WTI) recovers on Tuesday as improving Middle East exports and planned G7 reserve releases offer only limited relief to markets, while a deadlock in US-Iran talks leaves shipping through the Strait of Hormuz exposed to security risks, keeping a significant geopolitical risk premium in Oil prices.

At the time of writing, WTI trades around $89 after falling to an intraday low of $86.32, its lowest level since September 1.

According to the latest data from Kpler, Gulf crude exports, excluding Iran, averaged 18.3 million barrels per day in the final week of September, with the recovery driven mainly by Saudi Arabia. Additional supply relief could come from emergency stockpiles after G7 countries agreed on Friday to release 100 million barrels of diesel and crude oil from reserves.

Saudi Energy Minister Prince Abdulaziz bin Salman said on Tuesday that flows through the East-West Pipeline reached 5.8 million barrels per day. The pipeline carries crude to the Red Sea export hub of Yanbu, providing an alternative route that bypasses the Strait of Hormuz.

According to TD Securities, “Chinese product export restrictions and growing refiner demand are increasingly absorbing the increase in supply, keeping prices elevated and risks titled toward the upside in our view.”

Shipping risks remain elevated despite the recovery in exports. At least seven incidents involving tankers have been reported over the past week, according to shipping intelligence service Marisks. Meanwhile, fighting between Saudi Arabia and the Iran-backed Houthis leaves regional infrastructure exposed to fresh attacks.

Meanwhile, the US Energy Information Administration (EIA) raised its Oil price forecasts in its October Short-Term Energy Outlook, citing declining global inventories and tight diesel markets. The agency lifted its 2026 Brent forecast to $96.32 per barrel from $91.01 and its 2027 projection to $83.74 from $73.74. WTI forecasts rose to $88.21 for 2026 and $79.74 for 2027, from $84.65 and $69.74, respectively.

The EIA also lowered its global Oil demand forecasts to 102.4 million barrels per day for 2026 and 104.6 million for 2027, down from 102.6 million and 105 million, respectively.

Traders now turn to US inventory figures for fresh clues on supply and demand. The American Petroleum Institute (API) report is due later on Tuesday, followed by the EIA’s weekly inventory data on Wednesday.