Crude oil prices, which dipped yesterday, extended their losses earlier today following reports that Saudi Arabia will be exporting more oil through Oman while the East-West pipeline is repaired.
At the time of writing, Brent crude was trading at $105.89 per barrel, with West Texas Intermediate at $102.39 per barrel. Earlier in the week, Brent topped $108 briefly, and WTI spiked to over $103 per barrel. The spike followed the latest Houthi attacks on Saudi energy infrastructure, notably the East-West pipeline that was sending crude to the Red Sea port of Yanbu, from where it was exported to global markets.
Following the attack, which prompted the shutdown of the pipeline, worry about oil supply security spiked in sync with benchmark oil prices. Those fears got additional momentum from reports that Saudi Aramco had cancelled several oil cargoes that were supposed to be shipped to European buyers this month.
Further fuelling fears of shortages, Kpler reported that oil in storage at Yanbu port has fallen below 15 million barrels, from close to 21 million barrels in July. This would cover only a few days of exports at current rates (3.5 million barrels daily).
Meanwhile, Saudi Arabia said it would start redirecting more oil to its Persian Gulf ports, which calmed traders, as Aramco would, reportedly, avoid the Strait of Hormuz via ship-to-ship transfers in the Gulf of Oman.
The STS transfers of spot crude cargoes have been perfected in recent months by the United Arab Emirates, whose national oil company ADNOC has offered prompt supply in multiple tenders both within the Persian Gulf and the Fujairah-Sohar range outside the Strait of Hormuz.
Meanwhile, the Strait of Hormuz remains paralysed, with the latest strike on a vessel in the waterway happening just a few days ago. Tanker traffic rates remain in the single digits.
