Saudi Pipeline Repairs Fuel Oil Price Decline Amid Ongoing Geopolitical Tensions
International oil prices declined for a third consecutive session due to decreased market concerns over Middle East supply disruptions. The East-West Pipeline in Saudi Arabia, which was shut down following a drone attack last week, is being rapidly repaired. Market sources indicate that Riyadh plans to restore roughly half of the pipeline's transport capacity within the coming days.
The pipeline is critical for transporting crude from Saudi Arabia's eastern oil-producing region to Red Sea ports, and its closure had triggered fears of a global supply shortage. However, tension in the physical market has subsided with spot Brent crude slipping further to around $125 per barrel.
Despite the decline in oil prices, multiple market participants caution that supply fundamentals have not actually loosened. Rebecca Babin, senior energy trader at CIBC Private Wealth Group, said that supply remains tight and is providing support for prices.