Oil extends slump as Saudi Arabia restores key East-West pipeline
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Oil prices extended their biggest drop in more than six weeks on Thursday, with West Texas Intermediate falling toward $102 a barrel and Brent closing below $106. Saudi Arabia is seeking to restore about half the capacity of its damaged East-West pipeline within days, easing supply disruption concerns. The decline comes even as the US-Iran war and Russia-Ukraine conflict continue to curb Middle East supplies.
Key Facts
- West Texas Intermediate fell toward $102 a barrel after losing 3.2% on Wednesday, the most since Aug. 4.
- Brent closed below $106 a barrel.
- Saudi Arabia is seeking to return about half the capacity of its damaged East-West pipeline within days, and full operations in about six weeks.
- US Energy Secretary Chris Wright said 18 million barrels of crude and products went through the Strait of Hormuz earlier this week, with a seven-day average of 11 million barrels a day.
- Crude has rallied by about three-quarters this year as the US-Iran war curbed Middle East supplies and the Russia-Ukraine conflict drags on.
Pipeline Restoration
Saudi Arabia is seeking to return about half the capacity of its damaged East-West pipeline within days, and full operations in about six weeks, a person familiar said. The East-West pipeline, which carries oil across Saudi Arabia to its Red Sea coast, was damaged in attacks last week. The conduit has emerged as a critical workaround to shipments through the Strait of Hormuz, which remains contested by Washington and Tehran.
Market Impact
West Texas Intermediate fell toward $102 a barrel, after losing 3.2% on Wednesday, the most since Aug. 4, while Brent closed below $106. Crude has rallied by about three-quarters this year, as the US-Iran war curbed Middle East supplies and the Russia-Ukraine conflict drags on. Surging crude and fuel costs have fanned global inflationary pressures, prompting the Federal Reserve to raise interest rates on Wednesday and signal further tightening.
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