Oil Falls as Saudi Pipeline Restarts; LatAm Stocks Hold
Key Facts
- Saudi Arabia restarted its East-West pipeline easing concern over disrupted Gulf supply and helping push WTI crude down 2.74% to US$89.84 on Tuesday.
- The USO oil fund fell 2.75% to US$144.08 broadly in line with WTI because the fund reflects futures-market pricing and its own structure, not only the spot barrel.
- Brent crude settled at US$98.63, down 1.70% marking a fifth straight daily decline as traders reassessed the scale of any Hormuz supply shock.
- Petrobras New York shares rose 0.63% to US$20.76 even as global crude slid, after the company reported very high quality oil from its Morpho well in the Foz do Amazonas basin.
- YPF added 0.32% to US$53.35 and Ecopetrol gained 0.42% to US$16.91 showing Latin American producers moving independently of the global crude tape.
- US crude inventories rose by 1.786 million barrels last week following a 7.14 million barrel build the prior week, adding another soft demand signal to the session.
Today’s Focus
Global crude fell for a fifth straight session on Tuesday after Saudi Arabia restarted its East-West pipeline. The route, which was carrying about 4 million barrels per day before it was damaged, is the kingdom’s main escape hatch around the Strait of Hormuz. Brent settled at US$98.63, down 1.70%, while WTI fell 2.74% to US$89.84. The USO fund, which tracks WTI futures, dropped 2.75% to US$144.08.
The restart eased fears that a US-Iran conflict could trap Gulf supply, even though the market remains tight. Freight costs for very large crude carriers are still climbing as shipowners hesitate to sail into the risk zone, and US diesel and gasoline inventories continue to fall. India’s imports of Russian crude fell 16.5% in August, adding a second demand-side question mark alongside rising American crude stocks.
Latin American shares defied the commodity’s slide. Petrobras rose 0.63% to US$20.76 after flow tests from its Morpho exploration well in the Foz do Amazonas basin showed very high quality crude, potentially better than pre-salt output. YPF gained 0.32% to US$53.35 as it finances Vaca Muerta drilling through RIGI-backed international debt, while Ecopetrol added 0.42% to US$16.91.
What matters today. The market is trading pipeline logistics and Hormuz risk more than physical barrels, and Latin American producer shares are decoupling from the global crude tape.
01 The session in one read
Oil prices fell for a fifth straight session on Tuesday after Saudi Arabia signalled the reopening of its East-West pipeline, a route that bypasses the Strait of Hormuz and was carrying about 4 million barrels per day before it was damaged. Brent settled at US$98.63, down 1.70%, and WTI dropped 2.74% to US$89.84.
The restart eased the single biggest fear hanging over the market: that a US-Iran confrontation could choke off Gulf exports and send prices dramatically higher. Yet freight and refined product markets still tell a story of tight physical supply, with US gasoline and distillate inventories continuing to shrink and very large crude carrier rates climbing as shipowners avoid the Gulf.
The restart of the Saudi East-West pipeline was the session’s dominant bearish driver, outweighing high tanker freight rates and falling product inventories. If the line returns to its full capacity, traders may conclude the threat to supply through Hormuz was overstated. The variable to watch is whether crude keeps sliding once the restart is fully priced in.
02 The board
The United States Oil Fund, which tracks WTI futures, fell 2.75% to US$144.08 on Tuesday, close to the move in the underlying barrel price of US$89.84, because an exchange-traded fund’s return also captures futures-market pricing and fund structure. USO’s close tracking of WTI shows the move was in the barrel itself, not only in futures positioning.
Latin American producer shares did not follow crude lower. Petrobras rose 0.63% to US$20.76, Ecopetrol added 0.42% to US$16.91, and Argentina’s YPF gained 0.32% to US$53.35. All three are quoted in US dollars in New York, so their gains came despite, not because of, the global crude move.
| Asset | Level | Change |
|---|---|---|
| WTI crude (USO) | US$144.08 | -2.75% |
| Petrobras | US$20.76 | +0.63% |
| Ecopetrol | US$16.91 | +0.42% |
| YPF | US$53.35 | +0.32% |
Source: RT close, 2026-09-22. Where a commodity has no spot feed, an exchange-traded tracker or leading producer is shown as a labelled proxy.
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Latin America — Cross-Market Board
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 187,422.92 | +0.44% | +21.85% | 186,595.60 | 168,310 | 167,142 | — |
| IPSA | 11,426.83 | +0.61% | — | 11,357.82 | 11,210 | 10,984 | 1,513,213,483 |
| IPC MEX | 63,646.88 | +0.17% | +12.17% | 63,536.96 | 66,121 | 65,405 | 108,886,187 |
| MERVAL | 2,997,659 | -0.04% | +30.51% | 3,022,485 | 3,042,365 | 2,991,150 | — |
| COLCAP | 2,588.64 | +0.90% | — | 9.04 | 9.05 | 9.02 | 4,133 |
| BVL PERÚ | 59,529.36 | +1.84% | — | — | — | — | — |
| USD/BRL | 5.16 | +0.01% | -5.13% | 5.16 | 5.18 | 5.14 | — |
| EUR/BRL | 5.95 | +1.01% | -5.83% | 5.89 | 5.98 | 5.94 | — |
| USD/MXN | 17.06 | -0.24% | -8.58% | 17.10 | 17.08 | 17.01 | — |
| USD/CLP | 913.98 | +0.04% | -5.67% | 913.65 | 915.11 | 906.68 | — |
| USD/COP | 3,140 | +0.03% | -22.04% | 3,139 | 3,141 | 3,105 | — |
| USD/PEN | 3.36 | -0.66% | -4.82% | 3.38 | 3.38 | 3.35 | — |
| USD/ARS | 1,493 | +0.10% | +12.96% | 1,491 | 1,494 | 1,480 | — |
| USD/UYU | 40.27 | +1.24% | +1.80% | 39.77 | 40.27 | 40.23 | — |
| USD/PYG | 5,939 | +1.68% | -19.54% | 5,841 | 5,939 | 5,925 | — |
| USD/BOB | 11.64 | -0.76% | +72.04% | 11.73 | 11.72 | 11.64 | — |
| USD/DOP | 58.34 | +1.25% | -3.44% | 57.62 | 58.34 | 58.04 | — |
| USD/CRC | 445.92 | +0.89% | -9.71% | 441.97 | 448.50 | 445.92 | — |
03 What moved it
Saudi Arabia restarted its East-West oil pipeline at a low rate initially, according to Reuters sources, with Aramco working to return flows to normal. The corridor is the kingdom’s main escape hatch around the Strait of Hormuz, and any restored capacity shrinks the probability of a sudden supply shock.
On the demand side, the American Petroleum Institute estimated US crude inventories rose by 1.786 million barrels in the week ending September 18, after a substantial 7.14 million barrel build in the prior week. India’s imports of Russian crude fell 16.5% in August to about 2.1 million barrels per day, and are expected to decline again in September as new US sanctions allow tariffs of up to 100% on buyers of Russian oil.
04 The Latin American read
Petrobras shrugged off the crude slide after reporting that its Morpho exploration well in the offshore Foz do Amazonas basin produced very high quality crude, potentially better than output from Brazil’s prolific pre-salt fields. The company, with Shell and Strohm, also completed trials of a corrosion-resistant thermoplastic composite flowline designed for high carbon dioxide conditions, with a pilot planned for early 2027.
Guyana’s boom is accelerating, though no Guyana-listed proxy trades on this board. ExxonMobil is studying an optimisation that could lift the ONE GUYANA floating production vessel to around 290,000 barrels per day before year-end, adding new Atlantic Basin supply from the Stabroek Block, where ExxonMobil operates with Chevron and CNOOC.
In Argentina, YPF is financing Vaca Muerta shale development through international debt issued under the country’s RIGI investment regime, a structure designed to attract foreign capital to strategic energy projects. In Venezuela, Halliburton signed agreements with Eneva and WESCA to pursue oil and gas opportunities, adding a potential services channel into a market still shaped by sanctions risk.
05 The names to watch
Petrobras is the clear outlier this session: a New York-traded share rising while crude falls, driven by an exploration result that could upgrade the company’s reserve quality story. Watch whether the Foz do Amazonas well becomes a repeatable exploration theme or a one-off.
YPF and Ecopetrol both posted modest gains, suggesting investors see Latin American production growth as somewhat insulated from Middle East logistics. But that insulation cuts both ways: if Brent returns to triple digits, these shares may lag because their local currencies and fiscal regimes cap the upside of dollar crude.
06 The outlook
The immediate test is whether Saudi Arabia can return the East-West pipeline to full capacity, which would further deflate the Hormuz risk premium. The second test is US freight and diesel prices: if VLCC rates stay elevated and distillate inventories keep falling, the physical market will keep a floor under prices even as futures slide.
US President Donald Trump’s proposed US$5 billion fund to rebuild Gulf energy infrastructure could eventually tighten the physical market by pulling barrels toward reconstruction demand. For Latin American producers, the key variable is whether buyers in Asia and Europe start seeking non-Gulf barrels, which would support Brazilian, Guyanese and Argentine supply at the margin.
07 What to watch
- East-West pipeline flow rate: A faster return to the pre-attack rate of about 4 million barrels per day would further ease the Hormuz premium and pressure WTI toward the mid-80s.
- USO versus WTI gap: If USO starts underperforming the barrel price, it signals futures positioning rather than physical supply is driving the sell-off, making any rebound less reliable.
- VLCC freight rates: Persistently high tanker costs would keep physical Brent supported even as futures fall, widening the gap between paper and real-world prices.
- India’s September Russian import data: A further drop in Indian buying of Russian crude could tighten non-Atlantic supply and partly offset bearish US inventory builds.
Frequently Asked Questions
Why did oil fall on Tuesday?
Saudi Arabia restarted its East-West pipeline, easing fears that a Hormuz closure would trap Gulf exports, while US crude stockpiles rose for a second straight week.
Why does USO not track WTI exactly?
USO tracks WTI futures, so its return includes futures-market pricing and fund structure, not only the spot barrel price, which can amplify daily moves.
What does the pipeline restart mean for Latin America?
It lowers the probability of an immediate price spike, reducing urgency for non-Gulf supply, but it also makes Brazilian, Guyanese and Argentine barrels less strategically attractive in the short term.
Why did Petrobras shares rise while crude fell?
Petrobras reported very high quality crude from its Morpho well in the Foz do Amazonas basin, potentially better than the pre-salt, which lifted the stock independent of the commodity tape.
Market data: RT
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