Crude oil prices fell further on Thursday after reports that Saudi Arabia plans to increase oil shipments through Oman while repairs continue on its damaged East-West pipeline.
At the time of writing, Brent crude was trading at $103.8 per barrel, while West Texas Intermediate (WTI) stood at $100.8.
Both benchmarks had surged earlier in the week after Houthi attacks disrupted Saudi energy infrastructure, including the East-West pipeline that transports crude to the Red Sea port of Yanbu for export.
Brent briefly climbed above $108 per barrel, while WTI rose above $103, as the pipeline shutdown heightened concerns about Saudi Arabia’s ability to move crude to international markets.
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Those concerns intensified after reports that Saudi Aramco had cancelled several crude cargoes scheduled for European buyers this month.
Oil market data provider Kpler also reported that crude inventories at Yanbu had fallen below 15 million barrels, from almost 21 million barrels in July. At current export rates of around 3.5 million barrels per day, the stockpile would cover only several days of shipments.
However, Saudi Arabia’s plan to redirect more crude towards its Persian Gulf ports has helped ease some supply concerns.
Aramco is reportedly considering ship-to-ship transfers in the Gulf of Oman, allowing cargoes to bypass the Strait of Hormuz and reach international markets.
The arrangement could provide an alternative route while the East-West pipeline remains unavailable and reduce the immediate pressure on Saudi export capacity.
Ship-to-ship transfers of crude cargoes have become more established in the region in recent months, with the United Arab Emirates using the practice to facilitate supplies within the Persian Gulf and across the Fujairah-Sohar area outside the Strait of Hormuz.
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The Strait, meanwhile, remains severely disrupted, with tanker traffic still running in the single digits following repeated attacks on vessels in the waterway.
The disruption continues to keep a risk premium in oil markets, even as alternative Saudi export routes offer some relief to traders concerned about a prolonged supply shock.
