Oil Falls as Saudi Arabia Routes Additional Crude Shipments via Oman

Crude oil prices declined on Wednesday after reports emerged that Saudi Arabia is offering extra crude cargoes for delivery to Asian refineries via ship-to-ship transfers off the Port of Sohar in the Sultanate of Oman. The development helped ease market anxiety over potential supply interruptions from the Middle East.

Brent crude futures fell $3.63, or 3.3%, to $105.12 a barrel at 1523 GMT. West Texas Intermediate (WTI) futures dropped $4.11, or 3.9%, to $101.72 a barrel.

Gulf markets retreated amid rising regional tensions. According to sources cited by Reuters, Saudi Arabia is facilitating these additional crude shipments through offshore transshipment operations near Sohar.

Giorgio Stonovo, analyst at UBS, stated: “News about Saudi exports from the Gulf suggests diminishing concerns over the risk of escalating disruptions.”

Preliminary shipping data reported by the agency showed that only four vessels were observed transiting the Strait of Hormuz on Tuesday — down from seven the previous day and well below the 10-day average of 18 vessels.

Oil prices faced further downward pressure following the U.S. Energy Information Administration’s announcement today of a smaller-than-expected drawdown in U.S. crude inventories for the week ended September 11.