Oil prices fluctuate due to pipeline restrictions in Russia

Oil prices on Tuesday swung back and forth between concerns that the slowing economy could reduce demand and news that some oil exports have been suspended on the Russian-European Druzhba pipeline through Ukraine.

Crude oil prices have been under pressure for weeks on concerns that the recession could reduce oil demand. Brent crude fell 77 cents, or 0.8%, to $95.88 a barrel at 13:01 p.m. EDT (1701 EDT). US West Texas Intermediate (WTI) crude fell 88 cents, or 1%, to $89.88 a barrel. Earlier in the session, both benchmarks rose more than $1 a barrel. Russian pipeline monopoly Transneft said Ukraine had suspended the flow of oil through its pipeline because Western sanctions prevented a payment for transit fees from passing through Moscow. This pushed prices higher early in the session. Flows along the southern route of the Druzhba pipeline were affected, while the northern route serving Poland and Germany was not disrupted. "Not that we need it at this point, but it was another reminder of how tight the market is and how sensitive prices are to supply disruptions, especially those from Russia," said Craig Erlam of brokerage OANDA. Prices were under pressure from talks that European countries were making a last-ditch effort to revive the Iran nuclear deal. On Monday, the European Union put forward a "final" text to revive the 2015 Iran deal https://www.reuters.com/world/middle-east/irans-nuclear-negotiators-return-tehran-vienna-irna-2022-08-08. A senior EU official said a final decision on the proposal, which needs approval from the United States and Iran, was expected within "a few very, very weeks." The talks have been going on for months without an agreement. Iran's crude exports are at least 1 million barrels a day below the rate in 2018, when former US President Donald Trump exited the nuclear deal, according to tanker trackers. Oil has fallen more than $40 from a peak that briefly lifted Brent to $139 a barrel after Russia's invasion of Ukraine. The last round of weekly US oil supply reports is approaching, which will first be released by the American Petroleum Institute at 2030 GMT. Analysts expect a small decline of 400,000 barrels in crude oil stocks.