Global crude oil prices fell on Thursday after Saudi Arabia began exploring alternative ways to move its crude exports following disruptions to its East-West pipeline.
As of 7:20am WAT on Thursday, Brent crude was trading at $104.50 per barrel, representing a 1.21 per cent decline, while West Texas Intermediate stood at $101.20 per barrel, down 1.23 per cent, based on Oilprice.com data.
The latest movement came after crude prices climbed earlier in the week amid concerns over attacks on Saudi energy infrastructure and the possible impact on global supplies. Brent had risen above $108 per barrel, while WTI crossed $103.
The disruption affected Saudi Arabia’s East-West pipeline, which carries crude to Yanbu, a key export terminal on the Red Sea. The situation had raised concerns about the country’s ability to maintain shipments, particularly after reports that Saudi Aramco cancelled some crude cargoes destined for European customers.
Pressure on available supplies was also linked to lower crude inventories at Yanbu. Data from Kpler showed that stocks at the port had fallen to below 15 million barrels, compared with almost 21 million barrels in July.
Saudi Arabia has since sought to reduce the impact of the pipeline disruption by moving more crude towards its Persian Gulf ports. The alternative arrangement could involve ship-to-ship transfers in the Gulf of Oman, enabling Saudi cargoes to reach international markets without relying on the affected pipeline route.
The development has eased some of the market’s immediate concerns about a supply shortage. Similar arrangements have also been used by the United Arab Emirates, with ADNOC moving crude through tenders involving areas around the Persian Gulf and the Fujairah-Sohar corridor outside the Strait of Hormuz.
However, risks to global oil supplies remain, with tanker movements through the Strait of Hormuz still at low levels. Attacks on vessels in the waterway have also continued to raise concerns about the transportation of crude and refined petroleum products through the major shipping route.
For Nigeria, movements in international crude prices remain significant because oil exports are a major source of government revenue and foreign exchange. At $104.50 per barrel, Brent remained above $100 despite retreating from its weekly high.
