Brent drops to $98.47 as Saudi pipeline restarts after drone attack

Brent crude futures dropped 78 cents, or 0.79%, to $98.47 per barrel by 0651 GMT, while West Texas Intermediate slid $1.21, or 1.34%, to $89.31. Both benchmarks are now at roughly two-week lows, and Brent closed below $100 for the first time since 8 September. For buyers tracking input costs into forward power and gas pricing, six consecutive down-sessions is the kind of run that starts to feed through into procurement sentiment.

The mechanism is supply-side relief combined with diplomatic optimism. Saudi Arabia resumed operations on its East-West Pipeline to the Red Sea on Tuesday, restoring a route that had been shut since 11 September following drone attacks blamed on Iraqi militia, which had halted crude loading at Yanbu port. Riyadh had been rerouting roughly 4 million barrels per day, around 4% of global supply, and is now also offering more barrels to Asian refiners from locations outside the Strait of Hormuz. Reuters reported that US President Donald Trump said his envoys had held 'engaging discussions' with Iranian mediators, adding he believed there was 'significant momentum for a deal', even after warning a day earlier that he could 'annihilate' Iran.

The chart below tracks Brent over recent months, giving context to this week's slide back below $100.

What this means for UK buyers

Oil is not the direct price-setter for UK commercial gas and power contracts, but it shapes the broader energy cost backdrop that feeds into forward curves, freight, and LNG cargo economics. A sustained pullback in crude eases some of the inflationary pressure that has been running through energy-adjacent costs since the conflict began nearly seven months ago. Buyers with contracts up for renewal in the next quarter should treat this as one input among several, not a standalone signal to fix or hold.

• Saudi East-West Pipeline restart (approximately 4 million bpd rerouted capacity)
• Iraqi crude exports rising to 2.17-2.3 million bpd in August, per Vortexa and Kpler
• US crude inventories up 1.8 million barrels in the week to 19 September, against expectations of a draw
• US-Iran talks in New York described by traders as offering 'a glimmer of hope'
• Potential US diesel export ban floated by Trump as a price-control measure

Bloomberg noted that Iraq is also ramping up output, with oil minister Basim Mohammed reporting production above 3 million barrels per day and a target of over 600,000 bpd in exports via Turkey. Industry inventory data showing a 1.8 million barrel build, against analyst expectations for a draw, added further downward pressure ahead of the US Energy Information Administration's official release. Tim Waterer, chief analyst at KCM Trade, said the market 'is feeling more positive about the global oil supply situation than it did a few weeks ago', though he cautioned that strong rhetoric between Washington and Tehran persists alongside the negotiating track.

Watch the EIA's official inventory data and any formal outcome from the New York talks: a confirmed deal or a reversal in Iraqi export momentum would move the needle further than this week's pipeline restart alone.