Oil fell Tuesday as top exporter Saudi Arabia boosted flows through a key pipeline, overshadowing concerns over a U.S.-Iran stalemate.

Brent futures slid near $104 a barrel. The kingdom was said to have restored about half the capacity of its East-West pipeline following drone attacks. The conduit has been a crucial route bypassing the Strait of Hormuz, providing a lifeline to global markets as the world’s most important energy chokepoint was disrupted by the Middle East conflict.

A steady flow of crude also appears to be eking out of the Persian Gulf through Hormuz on vessels transiting covertly, despite ongoing risks to shipping. The flows are helping ease concerns that a deal to reopen the waterway remains elusive. In the United States, the Trump administration is releasing up to 40 million barrels from the nation’s emergency reserve, further pressuring prices Tuesday.

“Increased flows through Hormuz and the restart of Saudi Arabia’s East-West pipeline are giving the market some supply relief,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Group. “The question is what that means for Iran: Diminished leverage over Hormuz could bring it closer to the negotiating table, or prompt it to escalate to regain that leverage.”

While the nearest Brent contract remains in the triple digits, it’s just a day away from expiry on Wednesday, and the more active December futures traded near $96. West Texas Intermediate crude slid toward $91. The retreat follows a month when markets for real-world barrels were rocked into upheaval, with key gauges signaling a clamor for immediate delivery as freight costs soared, while fuel prices surged as global refinery capacity remains hobbled.

Crude is headed for a third monthly gain following the U.S. war on Iran, disruptions to the Saudi bypass route and potential diesel export curbs by Washington, with the global benchmark up about 70% this year.

While the market for physical barrels has been tight, the energy crisis would have to become “much bigger” and more protracted for the International Energy Agency to put a fresh release of oil stockpiles at the top of its agenda, Executive Director Fatih Birol said.

Producers in the Persian Gulf have been seeking ways to keep markets supplied despite the disruption caused by the war on Iran. Oman plans to more than double oil storage capacity at a port outside Hormuz to help customers reduce their exposure to the contested waterway.

As the conflict drags into its eighth month, the United States and Iran made little progress during talks in New York last week. Qatar is now holding meetings with the two warring sides and exchanging ideas on possible solutions, a Foreign Ministry spokesperson said Tuesday, with current efforts focused on building common ground.

Meanwhile, U.S. President Donald Trump is said to support a plan to ease sanctions on Russia in exchange for political prisoners, The Atlantic reported, citing U.S. envoy John Coale. Russia is a top oil producer and sanctions have made it more difficult to export its crude.

Diesel prices have also been pushed higher by both Iran and the Russia-Ukraine war, while uncertainty has continued to mount over U.S. measures to curb record prices for the fuel. Over the weekend, Trump said the White House was looking at curbs on diesel exports “very seriously.” European Union officials are increasingly optimistic that the U.S. will hold off on such a move.

TotalEnergies SE Chief Executive Officer Patrick Pouyanné said a U.S. ban on diesel exports being considered by Trump to curb high prices could backfire. “It’s a bad idea” as it forces the nation’s refineries to cut throughput, potentially driving up domestic gasoline prices, he said.

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(With assistance from Mia Gindis.)

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