Saudi Red Sea Oil Route Reopens, Sends WTI Prices Plummeting

Saudi Arabia's decision to reopen its Red Sea oil route has sent West Texas Intermediate (WTI) plummeting by 3.5% to a one-month low of $89.38 per barrel.

The move follows the restoration of operations on the east-west pipeline, which connects Saudi Arabia's eastern oil fields to the Red Sea coast, allowing crude loading at Yanbu port to resume.

This bypass route is seen as a crucial buffer against supply shocks in case of military tensions disrupting tanker traffic through the Strait of Hormuz.

The resumption of Saudi Red Sea exports has sparked hopes that Middle East supply chains may recover from disruptions caused by US-Iran tensions, leading to a deflation of the geopolitical risk premium priced into global oil markets.