Oil remained above $100 a barrel on Tuesday as recovering Middle Eastern crude exports eased fears of an immediate supply shortage but persistent shipping, insurance and refining problems kept pressure on global energy markets.
Brent crude was trading around $100.28 a barrel in early Tuesday trade after settling at $100.32 in the previous session.
US West Texas Intermediate was around $89.33 after settling Monday at $89.43.
Oil had fallen by almost $2 on Monday as traders responded to stronger Middle Eastern exports and the Group of Seven’s planned release of emergency oil and fuel reserves.
Middle Eastern crude exports rose above pre-war levels on four of the final seven days of September despite continued risks to vessels operating around the Strait of Hormuz.
The recovery has reduced concerns that the global market could face an immediate severe shortage.
But stronger crude flows have not returned the oil market to normal.
Reuters analysis shows that approximately 14.2 million barrels per day have recently been moving through the Strait of Hormuz, equivalent to about 80% of pre-war flows.
The remaining problem is increasingly one of transportation and processing rather than simply the availability of crude.
Tanker freight rates have surged as operators deal with security threats, complicated routing and an elaborate system for moving oil through and beyond the Gulf.
Rates for very large crude carriers transporting Middle Eastern oil to Asia recently exceeded $1.2 million per day, according to shipping broker Poten & Partners figures cited by Reuters.
That compares with roughly $30,000 per day in January.
Freight costs that previously represented around 3% of the delivered price of a barrel can now account for roughly 27%.
Those costs matter for oil-importing economies because a recovery in crude production or exports does not necessarily translate immediately into cheaper delivered energy.
Refining capacity is another constraint.
Damage and disruption affecting refining infrastructure in the Middle East and Russia have contributed to particularly tight conditions in diesel markets.
Meanwhile, the G7 has agreed to release 100 million barrels of crude and fuel from emergency reserves over four months, adding another source of supply to the market.
That release may ease some immediate pressure, but it does not by itself resolve the shipping, insurance and refining bottlenecks affecting the market.
The result is an unusual oil-market environment: Middle Eastern crude exports are recovering substantially, yet Brent remains above $100.
For oil-importing countries, including Pakistan, the distinction matters. The cost of energy depends not only on how much crude is produced but also on the cost and reliability of transporting, insuring and refining it.
Further improvement in Gulf exports could put downward pressure on crude prices, while renewed attacks on tankers or energy infrastructure could quickly reverse that trend.
For now, recovering supply is preventing a more severe shortage, but logistical and geopolitical risks are keeping the global oil market expensive.
Pakistan Report illustration.