Brent crude futures fell 73 cents, or 0.67%, to $108.02 a barrel at 0450 GMT. US West Texas Intermediate (WTI) futures dropped $1.10, or 1.04%, to $104.73 a barrel.

Both benchmarks had gained more than $3 on Tuesday. They also reached their highest levels since May 19.

The previous rally followed the suspension of oil loadings at Saudi Arabia’s Yanbu port. Saudi Arabia also reduced shipments to Europe, adding to supply concerns.

US Crude Inventories Rise Sharply

US crude, gasoline and distillate inventories all increased last week, according to market sources citing American Petroleum Institute data.

US crude stocks rose by 7.1 million barrels in the week ended September 11.

The increase came well above market expectations. Analysts polled by Reuters had expected crude inventories to fall by about 1.6 million barrels.

The unexpected build added pressure to oil prices. Higher gasoline and diesel inventories also raised concerns about near-term fuel demand.

However, Haitong Futures said the inventory increases did not change the underlying tightness in the global crude market.

Middle East Supply Disruptions Keep Market Tight

Despite the inventory increase, traders continued to focus on physical supply disruptions.

Priyanka Sachdeva, head of market insights at Phillip Nova, said the bigger concern remained disruption to Saudi Arabia’s East-West pipeline and Yanbu export infrastructure.

The infrastructure came under pressure after attacks on Saudi energy facilities.

KSE-100 Index Falls as PSX Faces Broad Selling Pressure

European diesel futures also reached a record high on Tuesday. The move highlighted tighter fuel markets as Middle East disruptions affected crude and refined-product flows.

Saudi Arabia Shifts Some Oil Shipments

Saudi Arabia has offered additional crude loadings to Asian refiners through ship-to-ship transfers near Oman’s Sohar port, according to people familiar with the matter.

The move followed the suspension of Saudi Arabia’s East-West pipeline.

Market sources said the pipeline shutdown came after an attack by Yemen’s Iran-aligned Houthis on Friday.

The disruptions have increased attention on Saudi Arabia’s alternative routes for moving crude to international buyers.

Hormuz Traffic Falls as Regional Attacks Intensify

Shipping traffic through the Strait of Hormuz also remained sharply below normal levels.

Visible vessel transits stood at four on Tuesday, preliminary shipping data showed. That compared with seven a day earlier and a 10-day average of 18.

The waterway handled about a fifth of global oil and liquefied natural gas supplies before the US-Israeli war with Iran began.

Falling traffic has added to concerns about global energy flows. However, the full impact depends on how long disruptions continue and how quickly producers and shippers can adjust routes.

For now, oil markets remain caught between two forces. Rising US inventories are weighing on prices, while disruptions in the Middle East continue to support supply concerns.