Saudi Pipeline Damage Fails to Dent Oil Prices Amid Supply Route Optimism
Oil prices fell by about 1% on Friday, extending losses for a third consecutive session. However, they remained above $100 a barrel, as hopes of alternative supply routes from the Middle East outweighed concerns over strikes between Saudi Arabia and Yemen's Houthis.
The Brent crude futures price dropped $1.01 to $103.77 a barrel by 0020 GMT, while US West Texas Intermediate futures fell $1.03 to $100.88 a barrel. Both benchmarks had declined about 1% the previous day.
Markets largely disregarded concerns over new supply disruptions despite Saudi Arabia and Yemen's Houthis exchanging fresh strikes across their border on Thursday, expanding the Middle East war front.
The suspension of crude loadings at Saudi Arabia's Red Sea export hub of Yanbu and Riyadh's cancellation of some deliveries to Europe after its East-West pipeline was damaged in an attack last week had driven oil prices to around four-month highs this week. However, sources told Reuters that Saudi Arabia was seeking to return about half the capacity of its East-West oil pipeline within days.
US Energy Secretary Chris Wright stated that crude should be flowing through the pipeline within days. Iranian state media reported that Iran's Revolutionary Guards Navy struck a Togo-flagged oil tanker while attempting an 'illegal passage' through the Strait of Hormuz on Thursday.