Brent Crude Falls on Friday

Brent crude fell to $104.4 a barrel on Wednesday, as markets weighed disruptions to Saudi supply. Satellite imagery and industry sources indicated that three pumping stations serving Saudi Arabia’s vital East-West Pipeline were damaged in last week’s attack, one more than previously assessed, while the repair timeline remains uncertain. Saudi Arabia and Iran-backed Houthi forces in Yemen exchanged fresh strikes across their border on Thursday, while civilians fled by boat across the Red Sea as fighting spread. Saudi Aramco has also informed at least two European refining customers that they will receive no crude next month following the attack on the key pipeline to the Red Sea. Meanwhile, China’s refined oil product exports rose 12.7% year on year in August, with jet fuel exports reaching a record high. Further easing of export controls in September could allow Chinese refiners to benefit from stronger overseas margins. Brent is up for the third week.

Brent Crude eased below $103 per barrel threshold on Friday from the four-month high of $106 on Tuesday as market speculated on the likelihood of higher supply from the Middle East. US President Trump noted the possibility that the US could re-escalate attacks against Iran after recent attempts of dialogue between Tehran, Washington, and GCC states have not restored maritime oil exports. Meanwhile, Saudi Arabia stated its East-West pipeline could come online in the next days after strikes from Iran-affiliated armies forced its suspension. The halt prevented 7 million barrels per day being allocated to the Red Sea, an alternative to halted tankers in the Persian Gulf due to blockades. The prolonged halt of tanker flows from the region forced major OPEC members to cut oil production, with Saudi output recently dropping to its lowest since 1990. Dwindling stockpiles of oil in China drove the major importer to raise orders in August, while the US SPR stands at a near record low.

Brent crude fell to around $102 per barrel on Friday, extending its decline for a third consecutive session as concerns over supply disruptions in the Middle East eased and hopes grew for renewed diplomatic efforts to end the conflict and restore energy flows. Saudi Arabia is targeting the recovery of around half the capacity of its East-West pipeline within days, with a return to full operations expected within six weeks. In the meantime, the kingdom is rerouting some crude exports through the Strait of Hormuz. Shuttle vessels transport crude through Hormuz before loading tankers waiting outside the strait, limiting their exposure to potential Iranian attacks. Reports also suggested that China had urged Iran to help curb Houthi militants after an appeal from Riyadh, as the rebel group intensified attacks on Saudi energy infrastructure. Meanwhile, President Donald Trump said he was weighing whether to resume attacks on Iran ahead of a meeting with Gulf leaders in New York next week.