Oil prices fell about 1% on Friday, extending losses for a third straight session as expectations of alternative routes for Middle Eastern crude outweighed renewed attacks between Saudi Arabia and Yemen’s Iran-backed Houthis.
Brent crude futures fell US$1.01 or 1% to US$103.77 a barrel by 0020 GMT, while US West Texas Intermediate crude declined US$1.03 or 1% to US$100.88. Both benchmarks had fallen about 1% on Thursday.
The market remained relatively calm despite fresh strikes exchanged between Saudi Arabia and the Houthis on Thursday, which expanded the conflict’s front.
Oil prices had climbed to around four-month highs earlier this week after attacks damaged Saudi Arabia’s East-West pipeline, forcing the suspension of crude loadings at the Red Sea export hub of Yanbu and the cancellation of some deliveries to Europe.
Three pumping stations along the pipeline were damaged, according to satellite imagery and industry sources. Traders have estimated that a prolonged shutdown could disrupt as much as 4% of global oil supply.
However, Saudi Arabia is seeking to restore around half of the pipeline’s capacity within days, Bloomberg reported. The kingdom is also offering additional crude cargoes to Asian refiners through ship-to-ship transfers off Oman’s Sohar port, potentially offsetting part of the disruption.
US Energy Secretary Chris Wright has also said crude should begin flowing through the pipeline within days.
The supply outlook remains uncertain, with sources giving differing estimates on how long repairs will take and when crude flows can return to normal.
Iran’s Revolutionary Guards Navy meanwhile said a Togo-flagged oil tanker was struck while attempting to make an “illegal passage” through the Strait of Hormuz on Thursday, according to Iranian state media.
JPMorgan said it had no clear baseline view for the oil market for the first time since the start of the US-Israeli war on Iran, highlighting the uncertainty surrounding supply and demand.
The conflict is also expected to feature at next week’s United Nations General Assembly, while the US State Department said an Iranian delegation would be able to attend.
Reuters
