Brent crude oil prices are heading for their first weekly decline since early September

Oil prices have been falling for the third consecutive day: On September 18, November Brent futures dropped by more than 2% to an intraday low of $102.4 per barrel, while U.S. WTI futures for next month’s delivery fell to $100. Overall, Brent prices are heading for a weekly decline for the first time in the last three weeks, Reuters notes. According to MarketWatch, over the past five sessions, Brent contracts have lost nearly 6%, and WTI contracts have fallen 3.66%.

Easing concerns among traders regarding supplies from Saudi Arabia outweighed fears about the conflict in the Middle East spreading (fighting has broken out between Saudi Arabia and the Iran-backed Houthis in Yemen), the agency notes.

This trend marks a significant reversal from the start of the week, when oil prices rose to nearly a four-month high: Brent briefly surged above $109 per barrel during the day, while WTI climbed to $106.5. Markets reacted to reports of a suspension of oil shipments at Saudi Arabia’s export hub—Yanbu—on the Red Sea and Riyadh’s cancellation of some shipments to Europe. All of this occurred after a key Saudi oil pipeline was damaged in attacks; since the start of the war in the Middle East, this pipeline had served as a bypass route for oil shipments from Saudi Arabia through the Strait of Hormuz.

However, it was reported yesterday that Riyadh is offering Asian oil refineries additional shipments of crude, to be transshipped between tankers via Oman, and also expects to restore about half the capacity of a key oil pipeline within a few days. Against this backdrop, oil prices have fallen.

Markets did not react to new threats to oil supplies stemming from the expansion of the conflict in the Middle East—after Saudi Arabia and the Iran-backed Houthis in Yemen exchanged strikes on each other’s positions on September 17, — the markets did not react, Reuters reports. Investors have also so far ignored reports from Iran’s Islamic Revolutionary Guard Corps, which announced on the morning of September 18 that a Togol-flagged tanker had been attacked the previous day while attempting to make an “illegal passage” through the Strait of Hormuz.

“Recent efforts to restore Saudi Arabia’s export capacity have somewhat eased concerns about supplies,” agreed Priyanka Sachdeva, head of market analysis at Phillip Nova (as quoted by Reuters). “The key question is whether physical flows [of oil supplies] will be able to normalize and how long that will take, ” she added, noting that if markets see “a sustained improvement in flows through the Strait of Hormuz, part of the geopolitical premium [in oil prices] could decline even further.”

This article was AI-translated and verified by a human editor