Global oil prices extended their decline after reports said Saudi Arabia would export more crude via Oman while the East-West pipeline undergoes repairs. The update eased some of the market’s concerns about an abrupt supply disruption.
At the time of writing, Brent crude was trading at $105.89 per barrel, while West Texas Intermediate stood at $102.39 per barrel. Earlier this week, Brent briefly climbed above $108 and WTI moved past $103. That rally followed the latest Houthi attacks on Saudi energy infrastructure, including the East-West pipeline that had been carrying crude to the Red Sea port of Yanbu for shipment to global markets.
After the attack shut the pipeline, worries over supply security surged and pushed benchmark prices higher. Those fears were reinforced by reports that Saudi Aramco had cancelled several crude cargoes that were due to be shipped to European buyers this month.
Concerns about shortages were also fueled by Kpler data showing that oil stored at Yanbu port had fallen below 15 million barrels, down from close to 21 million barrels in July. At current export rates of 3.5 million barrels per day, that stock would cover only a few days of shipments.
At the same time, Saudi Arabia said it would redirect more crude to its ports in the Persian Gulf, helping calm traders. According to reports, Aramco would seek to avoid the Strait of Hormuz by using ship-to-ship transfers in the Gulf of Oman.
That STS approach has been refined in recent months by the United Arab Emirates as well. Its national oil company, ADNOC, has offered prompt supply in multiple tenders both within the Persian Gulf and in the Fujairah-Sohar range outside the Strait of Hormuz.
Meanwhile, the Strait of Hormuz remains largely paralyzed. The latest strike on a vessel in the waterway took place only a few days ago, and tanker traffic levels remain in the single digits.
