Oil falls but head for 8% weekly gain on tight supply; US diesel hits record
Published Sat, Sep 12, 2026 · 09:52 AM
[HOUSTON] Oil prices fell on Friday (Sep 11) but remained on course for a weekly gain of more than 8 per cent, while US diesel prices hit a record high as attacks along Middle East shipping routes stoked concerns about prolonged supply disruptions.
Brent crude futures were down US$3.10, or 2.9 per cent, at US$104.53 a barrel at 1.25 pm CDT (1825 GMT).
US West Texas Intermediate (WTI) crude fell US$2.23, or 2.9 per cent, to US$100.25 a barrel. During the session, both benchmarks hit their highest levels since mid-May.
Both reversed early gains after the Financial Times reported that foreign ministers in the Middle East are trying to work out a temporary deal with Iran to manage shipping through the Strait of Hormuz.
On Thursday, Brent and WTI rose more than 6 per cent after an escalation in shipping attacks in the region.
But on Friday, traders were re-evaluating the risk.
“The things that were causing the panic yesterday are easing today,” said Phil Flynn, senior analyst with the Price Futures Group. “The question is will the market remain calm over the weekend? That’s when things seem to happen.”
The report of talks on the future of Hormuz had the biggest impact on market sentiment.
“Some headlines of possible new talks in the Middle East are weighing moderately on oil prices today,” said UBS energy analyst Giovanni Staunovo. “I keep seeing near-term risks to the upside for oil prices, but we should expect ongoing high price volatility too.”
In a further development for Riyadh, satellite imagery showed smoke on Thursday in the vicinity of Saudi Arabia’s East-West Pipeline, vital for the kingdom to divert its crude exports away from Hormuz.
As more reporting said a pumping station on the pipeline had been damaged by Iran-affiliated militants, prices stayed lower.
“It’s surprising the oil market remains down in light of reporting that Houthi rebels attacked the East-West Pipeline, which would impact seven million barrels of crude,” said Andrew Lipow, president of Lipow Oil Associates.
“Repairing a pumping station would require a lot more than repairing a break in the pipeline,” Lipow said. “Electrical systems would have to be repaired, the pumping system would need to be repaired.”
Supply disruptions
Oil supply disruptions due to the Iran war, along with Ukrainian attacks on Russia’s refineries, pushed the US national average diesel price past US$6 a gallon for the first time on Thursday, according to price tracker GasBuddy.
“Refined products, particularly diesel, are feeling a one-two punch right now,” said Tim Waterer, chief market analyst at KCM Trade.
“As long as both the Gulf shipping constraints and Russian refining outages remain in play, diesel and other refined products are likely to show a higher upside tendency than the broader crude market,” he added.
Commerzbank raised its year-end Brent crude forecast to US$85 a barrel from US$75, while increasing its diesel forecast to US$1,200 a tonne from US$950 and its jet fuel forecast to US$1,230 a tonne from US$980. REUTERS
