Oil prices faced a decline on Thursday as Saudi Arabia reportedly took measures to reduce supply restrictions. This comes as ongoing tensions in the Middle East keep crude oil prices above $100 per barrel.
Fluctuation of Brent and West Texas Oil Prices
Brent crude prices, as a global benchmark, fell by 0.9% to $104.85 per barrel, while West Texas Intermediate crude also dropped by 0.6% to $101.85 per barrel.
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The upward trend in crude oil prices this week has been curtailed due to reports of Saudi actions to address supply disruptions in the Red Sea caused by attacks from Houthi forces in Yemen. The Houthi forces have made advances on Yemen's western coast, giving them greater power to control the Bab el-Mandeb Strait. This strait is a vital link between the Red Sea and the Gulf of Aden, which Saudi Arabia relies on for its oil exports to global markets.
Saudi Arabia's Actions to Facilitate Oil Supply
According to reports, Riyadh has proposed additional crude oil loadings to Asian refineries through ship-to-ship transfers at the Port of Sohar in Oman. This move helps maintain the flow of some supplies despite high military tensions.
Additionally, Saudi Arabia is also working to restart half of the capacity of its key East-to-West oil pipeline, which was halted last week due to Houthi attacks, within the next few days. Analysts at UBS have predicted that there is a possibility of increased oil exports from Saudi Arabia.
In a separate report, U.S. representatives and Iran-backed Houthis met in Oman over the past weekend. During these negotiations, the Houthis reiterated their commitment to the 2025 ceasefire and promised not to attack American or Israeli vessels.
U.S. President Donald Trump also reiterated his claims on Wednesday night that Iran is seeking a peace agreement, adding that the U.S. is hopefully moving towards the end of the war. However, Washington and Tehran remain in conflict over the Strait of Hormuz, with traffic in this key waterway significantly reduced.
The number of cargo ships passing through the Strait of Hormuz dropped to just three on Wednesday, down from 12 the previous day, showing a significant decrease. Meanwhile, traffic in the Bab el-Mandeb Strait also fell to 21 vessels, compared to 24 on Tuesday.
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