Saudi Supply Disruptions Weigh on Oil Prices as Markets Eye Recovery
Oil prices continued their downward trend for the third consecutive day on Friday as concerns over Saudi supply disruptions eased. Brent crude futures fell by $0.79, or 0.75%, to reach $104 a barrel, while US West Texas Intermediate (WTI) futures dropped by $0.70, or 0.69%, to $101.20 a barrel.
The decline in prices comes despite fresh fighting between Saudi Arabia and Yemen's Iran-backed Houthis across their border on Thursday, expanding the Middle East war front. However, markets largely shrugged off these concerns as sources reported that Saudi Arabia was seeking to return about half the capacity of its East-West oil pipeline within days.
Priyanka Sachdeva, head of market insights at Phillip Nova, noted that 'recent efforts to restore Saudi export capacity have reduced some of the immediate supply anxiety.' However, analysts are still waiting for evidence of a clear supply improvement and a sustained recovery in Hormuz traffic before prices can stabilize.
The risks associated with transporting oil through the region remain high. Iran's Revolutionary Guards Navy reported that a Togo-flagged oil tanker was struck while attempting to make an 'illegal passage' through the Strait of Hormuz on Thursday.