Oil prices slip as Saudi pipeline repairs and Oman rerouting ease supply fears

Global oil prices fell for a third consecutive day, slipping by about 1% as Saudi Arabia’s efforts to reroute crude exports and repair a key damaged pipeline eased fears of a major supply crunch in the Middle East.

Brent crude futures dropped to $103.77 a barrel, while US West Texas Intermediate fell to $100.88. Both benchmarks remain comfortably above the $100 threshold despite the dip, reflecting a market that is still highly sensitive to geopolitical shocks but relieved by Riyadh’s quick workarounds.

Energy markets largely looked past fresh cross-border strikes between Saudi Arabia and Yemen’s Iran-backed Houthi rebels on Thursday. The attacks had threatened to widen a regional conflict that has already strained global energy supplies since the US and Israel struck Iran in February.

Instead, traders focused on Saudi Arabia's efforts to keep its oil moving. The country’s export logistics faced a major test last week when drone strikes damaged its East-West pipeline. Satellite imagery and industry sources confirmed that three pumping stations along the line were damaged — one more than initially estimated.

The damage forced Riyadh to suspend crude loadings at its Yanbu export terminal on the Red Sea and cancel some deliveries to Europe. Traders warned that a prolonged closure of the pipeline could cut off as much as 4% of global oil supply.

To limit the fallout, Saudi Arabia is working to restore about half of the pipeline's capacity within days, a timeline supported by US Energy Secretary Chris Wright, who said crude should begin flowing through the link shortly.

At the same time, the kingdom is offering Asian refiners alternative shipments via ship-to-ship transfers off Sohar port in Oman, bypassing the disrupted Red Sea route entirely.

"Improved logistics for Saudi crude exports have reduced the market's assessment of how much supply is at risk," said Simon-Peter Massabni, head of business development at XS.com, though he warned that the Middle East supply network remains highly vulnerable.

That vulnerability was highlighted on Thursday when Iran’s Revolutionary Guards Navy announced they had struck a Togo-flagged oil tanker attempting an "illegal passage" through the Strait of Hormuz, according to Iranian state media.

The unpredictable environment has left major financial institutions struggling to forecast prices. JPMorgan told clients it has no clear baseline view for oil markets for the first time since the US-Israeli conflict with Iran began.

The war is expected to dominate discussions at the United Nations General Assembly next week. The US State Department said an Iranian delegation will be able to attend.