Oil prices retreated approximately 2% on Thursday, September 17, 2026, to their lowest levels in one week following reports that Saudi Arabia is increasing crude cargo shipments through alternative routes. Despite the decline, crude remained above the $100 per barrel threshold as lingering concerns about potential widening of the Middle East conflict continued to support prices. Brent crude futures fell $2.67, or 2.5%, to $103.13 a barrel at 12:03 p.m.
ET, marking their lowest point since September 10. West Texas Intermediate futures declined $1.61, or 1.6%, to $100.82 a barrel, their lowest level since September 11. Both contracts had fallen roughly $3 on the previous day.
The price decline was attributed to two key developments. First, US Energy Secretary Chris Wright signaled a faster timeline for the return to service of Saudi Arabia's East-West pipeline, which had been halted following drone attacks. Second, Saudi Arabia began offering additional crude cargoes to Asian refiners through ship-to-ship transfers at Oman's Sohar port, easing supply concerns in the market.
According to Tim Waterer, chief market analyst at KCM Trade, crude retreated from weekly highs after these announcements addressed immediate supply disruption fears. Saudi Arabia is targeting the restoration of approximately half the capacity of its East-West oil pipeline within days, according to Bloomberg reporting. Oil prices had surged to around four-month highs earlier this week after shipping industry sources reported suspensions of crude loadings at Saudi Arabia's Red Sea export hub of Yanbu and cancellations of some cargo deliveries to European customers.
The East-West pipeline supplies the Yanbu terminal. Industry traders assessed that a prolonged closure of the pipeline could eliminate as much as 4% of global oil supply. While Saudi Arabia has not provided an official timeline for operations resumption, Energy Secretary Wright told CNBC on Tuesday that crude should be flowing through the pipeline within days.
Christopher Tahir, Senior Market Strategist at trading platform Exness, noted that oil prices extended the previous session's losses on Thursday as Middle East supply disruption concerns moderated somewhat, citing increased crude flows through additional offshore loadings via Oman and efforts to restore the East-West pipeline. However, Tahir cautioned that the physical market remains tight, which limits the scope for further price declines. He highlighted that tanker traffic through the Strait of Hormuz continues to decline, while tensions between Saudi Arabia and the Houthis leave Red Sea shipping and regional energy infrastructure vulnerable to renewed disruption.
According to assessments from three oil and security sources, three pumping stations serving the East-West pipeline were damaged in last week's attack, with the repair timeline remaining unclear. Beyond crude supply concerns, the diesel market has emerged as another pressure point. Disruptions to energy infrastructure in the Middle East and Russia have constrained fuel availability and tightened diesel supplies.
European gasoil futures, which serve as a benchmark for diesel prices, settled at record highs on Tuesday, as did US ultra-low sulfur diesel futures. A Ukrainian drone attack damaged a refinery in the Russian city of Yaroslavl on Thursday, causing a fire that was subsequently extinguished, according to regional Governor Mikhail Yevrayev. Regarding the broader outlook, Singapore's DBS Bank indicated its base-case scenario for the fourth quarter assumes tensions between the US and Iran will ease, potentially allowing Brent crude to stabilize within an $85 to $95 per barrel range.
Source: Marine News Magazine (marinelink.com), Reuters
Source: marinelink.com