Oil prices fell for a third consecutive session Friday, putting benchmark Brent crude on track for its first weekly decline in three weeks as traders grew more confident that Saudi Arabia can route enough crude around a damaged export pipeline to avoid a prolonged supply shortfall.
Brent crude futures dropped $1.65, or 1.6%, to $103.17 a barrel, while U.S. West Texas Intermediate crude fell 61 cents, or 0.6%, to $101.30 a barrel, according to Reuters price data. For the week, Brent was on pace to decline about 1.4%.
Saudi Workarounds Ease Immediate Supply Fears
The pullback reflects growing confidence that Saudi Arabia has found ways to keep crude flowing to customers despite attacks that damaged its East-West pipeline to the Red Sea earlier this year. Saudi Arabia has increased ship-to-ship crude transfers off Oman's Sohar port to reach Asian refiners, people familiar with the matter said, offsetting some of the lost pipeline capacity.
Additional supply cushions have also weighed on prices: inventories of refined petroleum products climbed in the United States, Singapore and Europe, while Chinese refined-fuel exports rose 12.7% year-over-year in August, adding to the supply available to the global market.
Despite the pullback, crude remained well above $100 a barrel, underscoring how tightly energy costs remain tethered to the seven-month-old regional conflict. Saudi Arabia and Iran-backed Houthi forces in Yemen exchanged new strikes Thursday, and shipping traffic through the Strait of Hormuz stayed constrained to roughly four vessels a day, versus a typical average of 16, according to energy-industry tracking cited Friday.
Even with the week's decline, oil remains sharply higher than year-ago levels, when Brent traded closer to $70 a barrel before the conflict escalated. Traders said the market is likely to stay volatile as long as the durability of Saudi Arabia's workaround shipping routes remains untested at scale, and as inventory and strike data from the region continue to swing sentiment session to session.
With U.S. markets closed for the weekend, the next test for prices comes with fresh American crude-inventory data and any update on the pipeline repair timeline early next week. Analysts tracking the disruption have said a full restoration of the damaged route, rather than incremental shipping workarounds, would be needed to meaningfully narrow the premium crude has carried since the conflict began.
