Oil Prices Slide as Saudi Arabia Reroutes Crude via Oman

Crude futures that had slipped the previous day extended losses after reports indicated Saudi Arabia would boost exports routed via Oman while the East‑West pipeline undergoes repairs. Traders reacted to the news by pulling back from the heightened risk premia that pushed Brent above $108 and WTI past $103 earlier in the week. At the time of reporting Brent was around $105.89 per barrel and WTI near $102.39 per barrel.

The earlier price spike followed Houthi strikes on Saudi energy infrastructure, including the East‑West pipeline that had been feeding crude to the Red Sea port of Yanbu for export. The pipeline’s shutdown raised immediate concerns about supply security, concerns that were amplified by reports Saudi Aramco cancelled multiple cargoes destined for European buyers this month.

Data from Kpler cited in reporting show crude inventories at Yanbu fell to under 15 million barrels from about 21 million in July — a level that would cover only a few days of exports at current shipment rates of roughly 3.5 million barrels per day. Those falling stocks helped drive the initial market reaction to the pipeline disruption.

Saudi officials and market participants said Riyadh would redirect more oil to Persian Gulf ports and use ship‑to‑ship (STS) transfers in the Gulf of Oman to avoid the Strait of Hormuz, a move that relieved some trader anxiety. The United Arab Emirates’ national oil company ADNOC has built experience conducting STS transfers and offering prompt supply in the Gulf and in the Fujairah‑Sohar range, a capability market sources say is being relied upon more heavily.

Despite the rerouting, the Strait of Hormuz remained effectively disrupted, with recent strikes on vessels in the waterway and tanker traffic rates staying in the single digits. The reporting and market commentary above are drawn from an Oilprice.com article by Irina Slav.