Oil Prices Fall As Saudi Arabia Offers More Crude Through Oman

Oil prices fell on Wednesday after Saudi Arabia offered additional crude cargoes for Asian buyers through Oman, easing concerns over the scale of supply disruptions in the Middle East.

Brent crude futures fell $1.30, or 1.2%, to $107.45 a barrel, while US West Texas Intermediate (WTI) crude dropped $1.96, or 1.85%, to $103.87 by 1307 GMT, according to Reuters.

The decline followed a more than $3 rise in oil prices in the previous session after reports that Saudi Arabia had suspended crude loadings at its Red Sea export hub of Yanbu and cancelled some shipments to European customers.

Saudi Arabia is now offering additional crude loadings to Asian refiners through ship-to-ship transfers off Oman’s Sohar port, according to people familiar with the matter cited by Reuters.

UBS analyst Giovanni Staunovo said the development suggested that concerns about a larger disruption to Saudi oil exports were easing.

However, shipping through the Strait of Hormuz remained severely reduced. Preliminary data showed only four vessels passed through the waterway on Tuesday, compared with a 10-day average of 18.

The Strait of Hormuz is a major global energy route, with analysts continuing to monitor the impact of reduced traffic on crude and refined-product supplies.

Diesel Supply Remains Tight

While crude prices eased, diesel markets remained under pressure.

European gasoil futures reached a record high on Tuesday before easing on Wednesday, reflecting tight fuel supplies caused by disruptions in Middle Eastern exports and restrictions affecting Russian fuel shipments.

Reuters reported that Russia is set to extend restrictions on diesel exports by fuel producers until the end of October, citing the Vedomosti newspaper.

In the United States, the national average diesel price has also risen above $6 a gallon for the first time.

Asian diesel refining margins have meanwhile climbed to a record of slightly above $87 a barrel, according to LSEG pricing data cited by Reuters.

US Inventories Rise

US crude, gasoline and distillate inventories also increased last week, putting additional pressure on oil prices.

According to data from the American Petroleum Institute cited by Reuters, US crude inventories rose by 7.1 million barrels in the week ended September 11, compared with analysts’ expectations for a decline of about 1.6 million barrels.

Despite Wednesday’s retreat, oil markets remain sensitive to developments around Middle East supply routes, particularly the Strait of Hormuz and Saudi Arabia’s alternative export arrangements.