International oil prices fell sharply on Tuesday, with crude prices dropping to as low as $87 per barrel as global supply recovered toward pre-war levels.
Western Texas Intermediate (WTI) declined by around $2, or 2%, to $86 per barrel, while Brent crude fell nearly 1.8% to $98. UAE crude, which is commonly used as a benchmark for Pakistan, dropped to around $103.
The decline came as oil supply from Saudi Arabia, Iraq and other secondary producers increased, with reports indicating that supplies reached as much as 7 million barrels per day in recent days. Iran’s oil exports, however, remain significantly lower.
Crude flows from the Gulf have also recovered despite continued security concerns around the Strait of Hormuz. In some days during late September, Gulf crude flows were reportedly as much as 91% above pre-war levels.
However, refined fuel supplies remain weaker at around 60% of normal levels. This could keep pressure on diesel and other refined petroleum products even as crude availability improves.
Shipping risks and ongoing geopolitical tensions around the region are also continuing to add a risk premium to international oil prices.
