Crude falls to $103 as Middle East risks ease

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Oil prices fell by about two per cent on Thursday to their lowest level in one week as concerns over disruptions to crude supplies from the Middle East eased.

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Brent crude futures declined by $2.67, or 2.5 per cent, to $103.13 a barrel, down from $105 on Wednesday, according to Reuters. US West Texas Intermediate crude fell by $1.61, or 1.6 per cent, to $100.82 a barrel.

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Recall that Brent jumped to as high as $109 earlier in the week. The Dangote Petroleum Refinery raised petrol prices amid the rise in oil prices.

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The decline in oil prices came after reports that Saudi Arabia was offering additional crude cargoes to Asian refiners through ship-to-ship transfers off Oman’s Sohar port.

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The move is expected to offset some of the disruption caused by attacks on Saudi Arabia’s East-West oil pipeline, which transports crude to the Red Sea export hub of Yanbu.

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Saudi Arabia is also seeking to restore about half of the pipeline’s capacity within days, according to a Bloomberg report cited by Reuters.

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Oil prices had risen to around four-month highs earlier in the week after shipping industry sources reported that crude loadings at Yanbu had been suspended and that Saudi Arabia had cancelled some cargo deliveries to European customers.

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The East-West pipeline supplies the Yanbu terminal, while traders said a prolonged closure could cut off as much as four per cent of global oil supply.

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Reuters said the pipeline was damaged by attacks last week, with three pumping stations affected. However, the timeline for repairs remained unclear, according to assessments from three oil and security sources.

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US Energy Secretary Chris Wright had earlier indicated that the pipeline could return to service within days, helping to ease concerns over a prolonged supply disruption.

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