Oil prices extend decline as Saudi pipeline restarts

Oil prices extend decline as Saudi pipeline restarts

Oil prices extended their losses on Wednesday as investors assessed improving supply prospects after Saudi Arabia resumed operations on a key crude pipeline.

Brent crude futures fell $1.09, or 1.1%, to $98.16 a barrel, while US West Texas Intermediate (WTI) futures dropped $1.50, or 1.67%, to $89.01 a barrel.

Both benchmarks have now declined for six consecutive sessions, reaching their lowest levels in about two weeks.

Market sentiment also weakened on hopes that diplomatic efforts could help end the US-Iran war. US President Donald Trump said on Tuesday that his envoys, Steve Witkoff and Jared Kushner, had held productive discussions with mediators seeking to resolve the conflict.

Trump said he believed there was “a lot of momentum” toward a possible deal, despite warning that the US could “annihilate” Iran.

Expectations of increased oil supplies and renewed diplomatic efforts pushed Brent below $100 a barrel on Tuesday for the first time since September 8.

“The market is currently feeling more constructive about the global oil supply picture than it was a few weeks ago,” said Tim Waterer, chief analyst at KCM Trade.

Saudi Arabia resumed operations on its East-West Pipeline to the Red Sea on Tuesday, according to three sources familiar with the matter. The move could help increase oil flows from the Middle East.

Drone attacks, which Saudi Arabia has blamed on an Iraqi militia, forced Riyadh to shut the pipeline on September 11 and suspend crude loadings at Yanbu port.

The pipeline allows Saudi Arabia to bypass the Strait of Hormuz and redirect around 4 million barrels of crude per day to Yanbu, equivalent to roughly 4% of global oil supply.

Saudi Arabia also offered additional crude to Asian refiners for loading from locations outside the Strait of Hormuz, further easing concerns over supply disruptions.