Brent Near Two-Week Low as Saudi Pipeline Confirmed Back Online; Record Brent Put Volume Signals Bearish Repositioning

Wednesday, September 23, 2026 | 6:45 AM ET

Brent (Nov) $99.00 | WTI (Nov) $89.65

Brent -0.25 after hitting $97.36 Tuesday, its lowest since September 8; WTI -0.87, its lowest since September first. European low-sulphur gasoil's premium to Brent hit a record near $95 a barrel after Trump said he backs a U.S. diesel export ban. Saudi Arabia confirmed the East-West pipeline restarted Tuesday and is resuming Yanbu exports; the kingdom also offered more barrels to Asian refiners from outside Hormuz the same day.

Bottom Line

Saxo's Ole Hansen pointed to the one piece of news actually worth attributing the lower price move to: the East-West pipeline reopening, now confirmed by three sources rather than the informal signals of recent days. That's a real, physical fact rather than a conditional offer, and it's landing alongside Iraq's oil minister saying the country is now exporting more than 3 million bpd with plans to push Turkey-routed exports above 600,000 bpd. Layered on top, a senior Iranian official told Reuters Hormuz itself could reopen within seven days if Washington eases military pressure and lifts its port blockade. None of these three threads has fully resolved, but together they're the most concrete supply-side improvement the market has seen since this phase of the conflict began, and price is responding accordingly.

The options market data adds real texture to how traders are actually positioning around that improvement. Tuesday saw a record roughly 764,000 Brent put contracts trade, concentrated heavily in narrow put spreads, more than 110,000 December $70/$69, 40,000 November $93/$92, and 38,500 February $70/$69 spreads together made up over half the day's volume. That's a lot of capital betting on a further move down, and it's consistent with the broader shift Bloomberg flagged: Brent's call skew is now the least bullish since June, meaning the cost of hedging against a renewed spike has fallen, and Brent has dropped out of overbought territory on its nine-day RSI after sitting there most of last week. Together this reads as a market that had priced substantial escalation risk unwinding that positioning now that Saudi and Iraqi supply news, plus Iran's conditional Hormuz offer, are giving traders a reason to.

The diesel side of this market is moving in the opposite direction, and Trump's diesel export ban comment is worth separating from the crude story entirely. His remark that he backs the idea of restricting U.S. diesel exports to bring domestic prices down pushed European gasoil's premium to Brent to a record near $95, since Europe has become heavily dependent on U.S. diesel and jet fuel imports precisely because Middle East supply has been disrupted. Analysts quoted by Reuters were direct that such a ban would do little to ease prices and could worsen supply disruptions globally, since it would just redirect the shortage rather than solve it, U.S. barrels currently filling the European gap would have nowhere to go, and Europe would need to find replacement supply from an already-tight pool. This is a case where a policy aimed at one problem, high U.S. pump prices, could make a related but distinct problem, the global diesel shortage, meaningfully worse elsewhere.

Goldman’s note on China gives useful ballast against reading the recent Gulf supply improvement as the only lever on price. The bank finds no evidence of a meaningful China import rebound yet, seaborne crude imports are up modestly in September but still nearly 3 million bpd below seasonal norms, and their models point to a return to roughly August levels in October as higher prices offset the pull from low domestic product stocks. What has changed is the composition: the Russian and Iranian share of China's imports fell from about half in August to under a third in September, pushing Chinese buyers toward openly traded barrels and adding competition for Brent and WTI specifically. Goldman's own framing is worth keeping in mind given today's price action: they think the market has already priced in a meaningful China import pickup that hasn't actually happened, and if China's appetite stays roughly where it is now, with no Mideast escalation, Brent could drift lower still, which lines up with both today's move and the bearish options positioning. Their stated view remains that a fresh escalation on Mideast production or export infrastructure, not a China demand surge, is the more likely source of any renewed price spike from here.

Trump's own Tuesday comments captured the same two-sided uncertainty everything else this week reflects: he warned he could "annihilate" Iran in the same set of remarks where he said his envoys have had productive talks with mediators. That gap between rhetoric and reported diplomatic progress is exactly why the put-heavy options activity, while notable, shouldn't be read as certainty that de-escalation sticks.