Oil prices ease as markets weigh Saudi supply recovery against Hormuz risks

Oil prices edged lower in early Asian trading on Monday (Sept. 21), but remained at historically elevated levels as markets balanced signs of recovering Saudi supplies against continuing disruption around the Strait of Hormuz.

A snapshot from OilPrice.com at 10am Tokyo time showed:

• WTI crude: $99.22 a barrel, down $1.08, or 1.08%

• Brent crude: $103.00, down $0.92, or 0.89%

• Murban crude: $117.90, down $3.47, or 2.86%

• US natural gas: $2.883, down 2.9 cents, or 1%

The retreat follows an earlier decline in crude prices, when Brent fell to around $103 and WTI to about $99.4 as traders responded to signs that Saudi Arabia could restore some disrupted exports.

Reuters reported that Saudi exports had risen above 4 million barrels per day in September, compared with 2.4 million bpd in August.

But the underlying supply picture remains unusually fragile.

Hormuz remains the big risk

The Strait of Hormuz — through which a large share of the world's oil and LNG normally passes — remains severely constrained by the US-Iran conflict and attacks on shipping.

OilPrice.com reported that only four commodity vessels were detected moving into or out of Hormuz on Sept. 17, well below normal traffic.

Some vessels with their tracking systems switched off may not have been captured by the data.

That means Monday's price decline should not necessarily be read as a return to normal conditions. It reflects the market's changing assessment of supply risks, including Saudi Arabia's ability to reroute and restore exports.

Saudi Arabia has been forced to adjust its export routes after damage to its East-West pipeline disrupted the kingdom's ability to move crude to the Red Sea port of Yanbu.

That has increased reliance on routes through or around Hormuz.

Saudi Arabia has also used offshore ship-to-ship transfers in the Gulf of Oman, allowing cargoes to be loaded without sending buyers' tankers deep into the Arabian Gulf.

Why $100 still matters

The fact that WTI was just below $100 while Brent remained above that threshold illustrates how tightly the market is balancing physical supply concerns with expectations of eventual diplomatic and logistical relief.

The International Energy Agency said in its September Oil Market Report that more than 10 million barrels per day of Gulf production remained shut in during August because of heightened security risks.

It also said global observed oil inventories fell another 95 million barrels in August, bringing cumulative draws since February to 507 million barrels.

The IEA has consequently pushed back expectations for a full recovery in Gulf production to 2027, while forecasting a 5.7 million bpd decline in global oil supply in 2026.

The US Energy Information Administration separately estimates that Middle East oil flows will remain constrained through the fourth quarter, with shut-in production averaging about 5.7 million bpd during that period.

Traders see Monday's decline is a price pullback, not an end to the oil-supply crisis.

The crucial variables remain the same: how quickly Saudi Arabia can restore alternative export routes, whether tanker traffic through Hormuz normalises, whether the Bab el-Mandeb remains open to commercial shipping, and whether Washington and Tehran can reach an arrangement that reduces the risk to Gulf energy flows.

For now, Brent remains above $100 and Murban — a key benchmark for Middle Eastern crude and particularly relevant to Asian buyers — remains considerably higher at $117.90.

The oil market is therefore sending two messages at once: some supply relief may be emerging, but the underlying geopolitical risk has not gone away.