On Friday, October 15, 2023, oil prices fell for the third consecutive day. This decline occurred due to reduced concerns about disruptions in Saudi oil supply following new clashes between Saudi Arabia and Yemen's Ansar Allah.
Details of the Oil Price Decline
As of 3:19 AM GMT, the price of Brent crude futures fell by 79 cents, or 0.75%, to $104 per barrel. Additionally, West Texas Intermediate crude futures also decreased by 70 cents, or 0.69%, trading at $101.20 per barrel. Both indices had dropped by about one percent on Thursday.
Read more: Saudi Arabia Seeks to Reopen Its East-West Pipeline
Brent crude is on track to record its first weekly decline in three weeks, having fallen 0.5% so far, while West Texas Intermediate has seen a weekly increase of 1.2%.
Causes of the Oil Price Decline
Markets largely ignored new threats to oil supply, even as Saudi Arabia and Iran-backed Ansar Allah launched new attacks along their border on Thursday. Earlier this week, oil prices approached a four-month high after sources reported that crude oil loading at Saudi Arabia's Yanbu export terminal on the Red Sea had stopped. This halt was due to damage to the East-West pipeline in last week's attack and the cancellation of some shipments to Europe by Riyadh.
However, prices fell after reports emerged that Saudi Arabia was working to restore about half of the East-West pipeline's capacity in the coming days and increase crude oil shipments to Asian refineries through ship-to-ship transfers near the Port of Sohar in Oman. Priyanka Sachdeva, head of market analysis at Philip Nova, stated, "Recent efforts to revive Saudi export capacity have alleviated some immediate concerns about supply."
Analysts have provided varying estimates on the time required to reopen the pipeline and return crude oil flows to normal. However, oil prices remain above $100 per barrel as markets await evidence of a significant improvement in supply.
Read more: Discovery of a Tanker Shipment Carrying 10 Million Barrels of Oil on a Sanctioned Route · Operation of the Mehr Persian Gulf Refinery by the End of September
