Oil Prices Slide Despite Supply Risks Amid Saudi Pipeline Disruptions
Oil prices have taken a hit despite ongoing supply risks in key regions. Brent crude futures fell by $0.93 to $107.82 per barrel on September 11, despite concerns over disruptions to global supplies.
The American Petroleum Institute reported that US crude inventories rose by 7.1 million barrels last week, against analysts' expectations of a 1.6 million-barrel draw. This unexpected increase in inventory weighed heavily on prices, with regional stock increases not changing the underlying tightness in the global market.
However, supply concerns persist due to disruptions at key ports and pipelines. In Saudi Arabia, oil loadings at Yanbu port were suspended after an attack by Yemen's Iran-aligned Houthis led to the shutdown of the East-West pipeline. This pipeline reroutes around 4% of global supply to the Red Sea port.
US Energy Secretary Chris Wright stated that crude flows through the pipeline should resume within days, with Saudi Arabia working to move more oil out of the Strait of Hormuz. However, estimates for the pipeline's downtime vary, with some sources suggesting it may take up to five or six weeks to repair.