Saudi oil rerouting pushes prices lower amid pipeline repairs

Oil prices declined further today after Saudi Arabia revealed plans to reroute crude shipments through Oman while its East-West pipeline undergoes repairs. The benchmark Brent crude price fell to $105.89 per barrel, down from a weekly peak exceeding $108, while West Texas Intermediate (WTI) settled at $102.39, below its earlier high of over $103.

The drop came after Saudi Aramco announced it would divert oil away from the Red Sea port of Yanbu, where storage has dwindled to 15 million barrels—well below the 21 million held in July. The pipeline shutdown followed Houthi attacks that disrupted exports, leading Aramco to cancel shipments destined for Europe this month. Analysts had warned about supply risks, noting that current stockpiles now cover only a few days’ worth of exports at the daily rate of 3.5 million barrels.

By using ship-to-ship transfers in the Gulf of Oman, Saudi Arabia avoided the Strait of Hormuz, a route still under pressure. The UAE’s state-owned ADNOC has recently increased such transfers, providing more flexibility in the region’s supply chains. However, a recent strike on a vessel in the Strait of Hormuz, recorded just days ago, kept freight rates depressed, signaling persistent threats to global oil movements.

Though the rerouting may ease immediate supply concerns, its long-term effects hinge on whether pipeline repairs advance without further setbacks. Markets had already tightened following the attacks, and any extended disruption could drive prices upward again, despite today’s temporary relief.