Saudi Export Resumption Eases Oil Price Pressure Amid Ongoing Middle East Risks

Oil prices have been falling for three consecutive days as market participants assess the prospects of resuming shipments from Saudi Arabia. Investors are increasingly focused on signs of export stabilization, while new risks to supplies from the Middle East have so far failed to intensify pressure on prices.

The price of Brent crude futures fell by 79 cents, or 0.75%, to $104 per barrel, while West Texas Intermediate (WTI) crude futures declined by 70 cents, or 0.69%, to $101.20 per barrel at the close of the latest trading session.

Saudi Arabia is preparing to resume operations of the East-West oil pipeline at roughly half its capacity within the next few days and is offering Asian refineries additional volumes of crude. This effort has somewhat reduced immediate concerns about supplies, according to Priyanka Sachdeva, head of market analysis at Phillip Nova.

However, the timeline for fully restoring the pipeline's operations and normalizing oil flows remains uncertain. Any further decline in the geopolitical premium built into prices would depend on a sustained increase in the number of tankers passing through the Strait of Hormuz, Sachdeva noted.