Oil prices declined for a third consecutive session on Friday as easing concerns over Saudi Arabia’s crude supply outweighed fears of further escalation in the Middle East conflict.
Brent crude futures fell 79 cents, or 0.75%, to $104 a barrel by 0319 GMT. US West Texas Intermediate crude declined 70 cents, or 0.69%, to $101.20 a barrel. Both benchmarks had ended about 1% lower in the previous session.
Brent is heading for a weekly decline of around 0.5%, which would mark its first weekly loss in three weeks. WTI, however, remains on course for a weekly gain of about 1.2%.
Markets have largely looked past renewed fighting between Saudi Arabia and Yemen’s Houthis. The two sides exchanged fresh strikes across their border on Thursday, raising concerns about the conflict spreading further across the region.
Oil prices had climbed close to four-month highs earlier in the week after reports that crude loadings at Saudi Arabia’s Red Sea export hub of Yanbu had been suspended. Riyadh also reportedly cancelled some deliveries to European customers after an attack damaged its East-West oil pipeline last week.
Concerns over supply have eased after reports that Saudi Arabia was working to restore around half of the pipeline’s capacity within days. The kingdom has also reportedly offered additional crude cargoes to Asian refiners through ship-to-ship transfers near Oman’s Port of Sohar.
“Recent efforts to restore Saudi export capacity have reduced some of the immediate supply anxiety,” said Priyanka Sachdeva, head of market insights at Phillip Nova.
However, estimates on when the damaged pipeline will fully reopen remain uncertain. Oil prices are still trading above $100 a barrel as markets await clearer evidence that physical crude supplies are returning to normal.
Analysts are also closely watching traffic through the Strait of Hormuz. Any sustained improvement in oil shipments through the strategic waterway could reduce some of the geopolitical premium currently built into prices.
Despite easing supply concerns, risks remain for energy shipments across the region. Iran’s Revolutionary Guards Navy said a Togo-flagged oil tanker was struck while attempting what it described as an “illegal passage” through the Strait of Hormuz.
Meanwhile, diplomatic efforts between the United States and Iran remain stalled. The two countries have not resumed peace talks since an interim agreement reached in June collapsed within weeks.
