Oil Prices Head for Weekly Loss as Saudi Export Fears Ease

Crude oil prices were on course for a weekly decline after a three-week series of gains, as traders' fears about Saudi Arabia’s ability to continue exporting oil appeared to have been quelled by reports about ship-to-ship transfers in the Gulf of Oman. At the time of writing, Brent crude was trading at $103.65 per barrel, with West Texas Intermediate at $101.04 per barrel, both set for a modest loss. However, it bears noting that both remain above $100 per barrel, which keeps the pressure on end fuel prices that are frustrating drivers and making governments nervous. Fears about Saudi oil exports arose after the Yemeni Houthis attacked the East-West pipeline that carried Saudi oil to the Red Sea, and from there to global markets. Saudi Arabia has relied heavily on the pipeline since the war began, moving roughly 4 million to 5 million bpd through the system during the past six months. Now, this is temporarily gone, and there is only a limited amount of supply in tanks at the port of Yanbu. Because of this, Saudi Arabia earlier this week canceled several cargoes of crude that were supposed to be shipped to Europe. This deepened concerns but not for long, after reports emerged that Aramco had switched to the Persian Gulf, moving the oil out via ship-to-ship transfers off the coast of Oman, in the Gulf of Oman, which is outside the Strait of Hormuz. Reports about Aramco expecting to restore half of the daily flows via the East-West pipeline also contributed to the shift in trader mood, even though the global shortfall will not disappear if Aramco starts pumping 2 to 2.5 million barrels daily via the pipe. “The key question is whether physical flows can normalise and what could be the timeline. If we see a sustained improvement in Hormuz traffic, some of the geopolitical premium can unwind further,” Phillip Nova analyst Priyanka Sachdeva said, as quoted by Reuters. By Irina Slav for Oilprice.com More Top Reads From Oilprice.com

Crude oil prices, which dipped yesterday, extended their losses earlier today following reports that Saudi Arabia will be exporting more oil through Oman while the East-West pipeline is repaired. At the time of writing, Brent crude was trading at $105.89 per barrel, with West Texas Intermediate at $102.39 per barrel. Earlier in the week, Brent topped $108 briefly, and WTI spiked to over $103 per barrel. The spike followed the latest Houthi attacks on Saudi energy infrastructure, notably the East-West pipeline that was sending crude to the Red Sea port of Yanbu, from where it was exported to global markets. Following the attack, which prompted the shutdown of the pipeline, worry about oil supply security spiked in sync with benchmark oil prices. Those fears got additional momentum from reports that Saudi Aramco had cancelled several oil cargoes that were supposed to be shipped to European buyers this month. Further fuelling fears of shortages, Kpler reported that oil in storage at Yanbu port has fallen below 15 million barrels, from close to 21 million barrels in July. This would cover only a few days of exports at current rates (3.5 million barrels daily). Meanwhile, Saudi Arabia said it would start redirecting more oil to its Persian Gulf ports, which calmed traders, as Aramco would, reportedly, avoid the Strait of Hormuz via ship-to-ship transfers in the Gulf of Oman. The STS transfers of spot crude cargoes have been perfected in recent months by the United Arab Emirates, whose national oil company ADNOC has offered prompt supply in multiple tenders both within the Persian Gulf and the Fujairah-Sohar range outside the Strait of Hormuz. Meanwhile, the Strait of Hormuz remains paralysed, with the latest strike on a vessel in the waterway happening just a few days ago. Tanker traffic rates remain in the single digits. By Irina Slav for Oilprice.com More Top Reads From Oilprice.com Oilprice Intelligence brings you the signals before they become front-page news. This is the same expert analysis read by veteran traders and political advisors. Get it free, twice a week, and you'll always know why the market is moving before everyone else. You get the geopolitical intelligence, the hidden inventory data, and the market whispers that move billions - and we'll send you $389 in premium energy intelligence, on us, just for subscribing. Join 400,000+ readers today. Get access immediately by clicking here.

Crude oil prices, which dipped yesterday, extended their losses earlier today following reports that Saudi Arabia will be exporting more oil through Oman while the East-West pipeline is repaired. At the time of writing, Brent crude was trading at $105.89 per barrel, with West Texas Intermediate at $102.39 per barrel. Earlier in the week, Brent topped $108 briefly, and WTI spiked to over $103 per barrel. The spike followed the latest Houthi attacks on Saudi energy infrastructure, notably the East-West pipeline that was sending crude to the Red Sea port of Yanbu, from where it was exported to global markets. Following the attack, which prompted the shutdown of the pipeline, worry about oil supply security spiked in sync with benchmark oil prices. Those fears got additional momentum from reports that Saudi Aramco had cancelled several oil cargoes that were supposed to be shipped to European buyers this month. Further fuelling fears of shortages, Kpler reported that oil in storage at Yanbu port has fallen below 15 million barrels, from close to 21 million barrels in July. This would cover only a few days of exports at current rates (3.5 million barrels daily). Meanwhile, Saudi Arabia said it would start redirecting more oil to its Persian Gulf ports, which calmed traders, as Aramco would, reportedly, avoid the Strait of Hormuz via ship-to-ship transfers in the Gulf of Oman. The STS transfers of spot crude cargoes have been perfected in recent months by the United Arab Emirates, whose national oil company ADNOC has offered prompt supply in multiple tenders both within the Persian Gulf and the Fujairah-Sohar range outside the Strait of Hormuz. Meanwhile, the Strait of Hormuz remains paralysed, with the latest strike on a vessel in the waterway happening just a few days ago. Tanker traffic rates remain in the single digits. By Irina Slav for Oilprice.com More Top Reads From Oilprice.com