Oil rises as Trump rejects Iran ceasefire, Saudi pipeline resumes

Brent crude at $106.72, WTI at $93.91 amid supply deficit

Investors weighed the prospect of continued disruption to Middle Eastern supply chains against fresh signs of recovering flows from Saudi Arabia’s eastern oil fields. Front-month November Brent crude futures gained 1.4% to $106.72 a barrel, and West Texas Intermediate rose 1.4% to $93.91 a barrel. Both benchmarks had pared gains Monday after Saudi Arabia resumed loading vessels at the Red Sea port of Yanbu via its East-West pipeline, a key export route that bypasses the Strait of Hormuz.

President Trump rejected an Iranian proposal for a seven-day ceasefire that would have reopened the Strait of Hormuz and resumed nuclear negotiations in exchange for the U.S. lifting its blockade of Iranian ports, The Wall Street Journal reported. The proposal would have paired a seven-day pause in fighting with the reopening of the strait and the resumption of nuclear talks in exchange for the U.S. lifting its blockade of Iranian ports.

The gap between the U.S. and Iranian positions leaves the prospect of a near-term agreement, and a broader normalization of oil flows through the strait, uncertain, according to Sally Auld, group chief economist at National Australia Bank. The Strait of Hormuz is one of the world’s most important oil chokepoints.

The East-West pipeline had been carrying roughly 4 million barrels a day before it was shut due to drone attack damage on Sept. 10, The Wall Street Journal reported. It is now operating at around 3.5 million barrels a day following repairs. The pipeline has around 7 million barrels a day of crude capacity, including roughly 2 million barrels a day serving refineries, and links eastern Saudi oil facilities with Yanbu on the Red Sea.

Saudi Arabia has also increased shipments through its Gulf terminals. Loadings from Ras Tanura have risen to around 6.5 million barrels a day from roughly 1.5 million barrels a day in early September, according to data from Kpler, a commodity tracking firm. Combined crude exports from Saudi Arabia, the United Arab Emirates, and Iraq have recovered to nearly 13 million barrels a day, the highest since the war began and close to 80% of prewar levels, Kpler data showed.

The key question is whether Saudi Arabia can sustain higher Gulf shipments as exports from Yanbu recover, said Hamad Hussain, senior economist at Capital Economics. Sustained flows through both routes could lift Saudi exports above levels seen before the pipeline attack and add more crude back to the market, he said.

Physical crude markets remain tight. The global market is running a deficit of around 1 million to 2 million barrels a day, with Middle Eastern supply losses particularly constraining medium- and heavy-crude grades, according to Johannes Rauball, upstream analyst at Kpler, in a report Monday. Refiners have increasingly sought alternative barrels from Latin America and elsewhere as availability of comparable Middle Eastern grades has tightened, he said.

The disruption has also increased pressure on tanker markets. Rerouting Saudi crude through less efficient Gulf shipping routes has roughly doubled the number of vessels required to move the same volume, pushing Very Large Crude Carriers and dirty-tanker rates to record levels, Kpler said. The firm expects freight-market tightness to persist and sees the reopening of Hormuz as a gradual and uneven process.

The Strait of Hormuz carried an average 21.6 million barrels a day of crude oil and petroleum liquids in the fourth quarter of 2025, before the conflict began, equivalent to roughly one-fifth of global petroleum liquids consumption, according to the Energy Information Administration. Flows fell to an average 4.9 million barrels a day in the second quarter as the war severely disrupted traffic through one of the world’s most important oil chokepoints.