Europe reportedly discussed releasing 50 million barrels of diesel and 50 million barrels of crude, helping ease near-term supply concerns.
- Saudi Arabia has restored its East-West Pipeline to more than 80% of capacity.
- Barclays raised its Q4 Brent forecast to $115 a barrel.
- Ole Hansen, Head of Commodity Strategy for Saxo Bank, said crude supply is becoming less of an immediate problem while shortages of refined products remain the bigger concern.
Oil prices fell sharply on Friday after U.S. President Donald Trump said Europe had agreed to release a “massive amount” of diesel from emergency reserves, potentially easing some of the supply shortage caused by disruptions from the U.S.–Iran war.
“The process will begin immediately,” Trump said in a Truth Social post on Friday.
This came after European governments reportedly discussed a French proposal to release 50 million barrels of diesel, along with an additional 50 million barrels of crude, from International Energy Agency (IEA) members.
Brent crude for December deliveries fell nearly 3% to $99.2 a barrel, before edging back over $100. U.S. West Texas Intermediate (WTI) contracts expiring in November fell more than 3% to $90 per barrel.
Refined Products Availability Is The Main Concern, Says Hansen
Veteran commodities expert and Head of Commodity Strategy for Saxo Bank, Ole Hansen, in a post on X, said crude supply is becoming less of the immediate problem as Middle East flows recover, while shortages of refined products such as diesel remain the bigger concern.
“The developments once again highlight that the main stress in energy markets has shifted from crude availability to refined products. Middle East crude flows are recovering, but reduced refinery capacity and output across the Middle East and Russia, together with China canceling oil-product export cargoes to bolster domestic supply, continue to constrain global fuel availability and keep prices elevated,” Hansen said.
East West Pipeline At 80% Capacity
Saudi Arabia has sharply increased crude flows through its East-West Pipeline, with Saudi Aramco now pumping close to 6 million barrels per day, or more than 80% of the pipeline’s capacity, according to a Bloomberg report on Friday. Parts of the pipeline were destroyed by Yemen-based Houthis last month.
The pipeline has become increasingly important during the Middle East war, as shipping through the Strait of Hormuz remains disrupted.
Oil Still Well Above Pre-War Levels
Despite Friday’s drop, crude remains substantially higher than before the U.S.-Israeli strikes on Iran began on February 28. At current levels, Brent has gained roughly 38%, while WTI is up about 34%.
Barclays sees it climbing higher. It reportedly said that while Middle East oil flows are improving, the market remains tight because inventories are still falling and buyers are paying higher prices for near-term supplies. It raised its fourth-quarter (Q4) Brent forecast to $115 a barrel and full-year 2026 forecast to $100 a barrel.
Retail Stays Bearish On USO, UCO
Retail sentiment surrounding United States Oil Fund (USO), which tracks WTI, and ProShares UltraShort Bloomberg Crude Oil (SCO) remained ‘bearish’ over the past 24 hours.
At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was up 0.8%; the Invesco QQQ Trust ETF (QQQ) jumped 1.2%; while the SPDR Dow Jones Industrial Average ETF Trust (DIA) gained 0.3%.
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