Oil Prices Rise After Trump Refutes Iran Sanctions Relief Claims

Oil prices experienced an uptick on Wednesday after US President Donald Trump publicly rejected reports suggesting he might consider relaxing sanctions on Iran. This development comes as Qatar actively promotes peace negotiations, while crude supply from West Asia shows signs of recovery following recent declines.

By 0131 GMT, Brent crude futures had increased by $1.14, or 1.11%, reaching $103.73 per barrel. Simultaneously, US West Texas Intermediate (WTI) crude gained 34 cents, or 0.38%, to trade at $89.72 per barrel. Brent is on track for its largest monthly gain since July, rising approximately 14%, and WTI is poised for a 4% monthly increase after recently surpassing $106 for the first time since May.

The price gap between Brent and WTI has widened to its most significant level in four months. Market participants are closely monitoring potential US policies that could limit diesel exports. Such restrictions might lead to a surplus in the domestic market, prompting American refiners to reduce crude processing volumes.

President Trump is reportedly weighing an alternative approach to an outright diesel export ban. Instead, he might permit sales of red-dyed diesel, a version intended for off-road use, as a means to provide some relief to consumers ahead of the November mid-term elections.

Saul Kavonic, head of energy research at MST Marquee, commented on the market dynamics: "There is evidence of improving crude flows through the Strait of Hormuz, and hopes are rising for alternatives to a US diesel export restriction. Additionally, no significant escalation from Iran has occurred in the last 24 hours, which has contributed to a modest easing in prices." He also noted that the overall situation remains unstable, with high costs and logistical constraints continuing to affect oil transportation.

On the diplomatic front, Qatar expressed optimism about progress in shuttle diplomacy efforts between Iran and the United States. Majed al-Ansari, spokesperson for the Qatari Foreign Ministry, told reporters, "We are conveying messages between the parties and working to find common ground that could lead to an agreement preventing further conflict repercussions." This diplomatic engagement aims to reduce tensions that have impacted global energy markets.

Despite these efforts, President Trump refuted a recent Axios report citing unnamed US officials who claimed he was open to granting Iran sanctions relief and releasing frozen Iranian assets in exchange for tangible actions regarding Tehran's nuclear program. Trump took to Truth Social to state plainly, "This is untrue. I offered them NOTHING." His firm denial underscores ongoing uncertainty around US-Iran negotiations.

Meanwhile, Saudi Arabia resumed oil tanker shipments from its Red Sea port of Yanbu after restarting the East-West Pipeline, signaling an improvement in regional export capacity. Data shows that crude oil exports from West Asian producers rebounded in September, reaching 16.328 million barrels per day—the highest level since the US-Israeli conflict with Iran intensified in late February.

In the United States, market sources reported last week that crude oil and gasoline inventories increased, while distillate stocks declined, according to data from the American Petroleum Institute. Crude inventories rose by approximately 1.02 million barrels in the week ending September 25.

Official inventory figures from the US Energy Information Administration (EIA) are expected at 10:30 a.m. EDT (1430 GMT). Analysts surveyed by Reuters anticipate that crude and product inventories may have decreased, which could influence prices further.

The recent volatility in oil prices reflects a complex interplay between geopolitical developments, supply chain adjustments, and shifting US policy considerations. As global energy markets continue to respond to these factors, traders and analysts will be closely watching for updates on diplomatic progress and inventory data that could impact future supply and demand balances.