Oil extends losses as Saudi Arabia reportedly offers ship-to-ship crude transfers after pipeline hit
Oil prices extended their decline to Thursday as concerns over disruptions to supply following attacks on the Saudi Arabia's key East-West pipeline eased.
Brent futures, the international benchmark, was slightly lower at $105.81 per barrel, while U.S. crude oil was down 0.22% at $102.14 a barrel.Β
Saudi Arabia is making additional crude cargoes available to Asian refiners through ship-to-ship transfers near Oman's Sohar port, helping cushion the impact on global supplies from attacks on the kingdom's East-West pipeline to the Red Sea, Reuters reported, citing sources familiar with the matter.
Earlier this week crude loadings at Saudi Arabia's Red Sea export terminal at Yanbu were halted and Riyadh canceled some shipments to European customers.
Yanbu has become Saudi Arabia's key route for oil exports since Iran began blockading the Strait of Hormuz following U.S. and Israeli attacks on the country in late-February.Β
Peter Massabni, head of business development at XS.com, said in a note late Wednesday that Saudi Arabia's efforts to find alternative export routes following the disruption at Yanbu have reassured markets that some lost crude supply could return.Β
However, he cautioned that the outlook remains highly dependent on developments in the Middle East.
A renewed escalation that causes deeper disruptions to regional oil and gas production and exports would keep inflation risks elevated and put further upward pressure on bond yields, Massabni said.
"This uncertainty regarding escalation paths in the region, along with crude, gasoline, and diesel prices staying at high and critical levels, could fuel pessimism about the US Federal Reserve monetary policy path," he wrote.
