Oil prices fell for a third consecutive session on Friday as progress on repairing Saudi Arabia’s damaged East-West pipeline eased immediate supply fears, even though shipping through the Strait of Hormuz remained severely disrupted. Brent crude slipped by roughly 1% to 2%, trading around $102.5 to $104 per barrel, while West Texas Intermediate fell to approximately $100 to $101. Both benchmarks pulled back sharply from this week’s highs near $110 and $106.
Saudi repair hopes are removing some risk premium. Riyadh is working to restore roughly half of the pipeline’s capacity within days, with full repairs potentially taking about six weeks. The route normally carries 3 million to 4 million barrels a day toward the Red Sea, providing a critical alternative to Hormuz, while some estimates put total capacity as high as 7 million barrels a day. Saudi Aramco has also offered additional crude to Asian buyers through ship-to-ship transfers near Oman, including off the port of Sohar, giving traders more confidence that exports can continue. ANZ Research analysts said the possibility of returning Saudi volumes, combined with profit-taking after two weeks of gains, helped pull crude lower.
“Recent efforts to restore Saudi export capacity have reduced some of the immediate supply anxiety,” said Priyanka Sachdeva, head of market insights at Phillip Nova. “The key question is whether physical flows can normalise and what could be the timeline. If we see a sustained improvement in Hormuz traffic, some of the geopolitical premium can unwind further.”
The Strait of Hormuz remains the larger unresolved risk. Only four commodity vessels passed through the strait on Thursday, according to preliminary Kpler data, compared with a 10-day average of around 16. Before the escalation, the waterway handled roughly one-fifth of global oil and gas shipments. Iran’s Revolutionary Guard said it struck a Togo-flagged tanker attempting to pass through the strait, keeping further disruption risk elevated. Diplomatic activity is also rising ahead of United Nations General Assembly meetings next week: President Trump said he is nearing a decision on whether to resume large-scale military action against Iran, while China’s foreign minister urged Washington and Tehran to exercise restraint and reopen the strait.
US inventory data and Federal Reserve policy complicate the outlook. Official Energy Information Administration figures showed commercial crude inventories fell by about 640,000 barrels last week to 423.4 million barrels, a third consecutive decline but smaller than expected. The Federal Reserve raised rates by 25 basis points this week and signalled further tightening may follow, increasing concern that higher borrowing costs could slow fuel demand. Analysts noted that Saudi pipeline repairs should ease some physical pressure, but continued restrictions around Hormuz and disruptions to other global supplies are likely to keep crude prices supported above $100.
For now, the market is caught between improving logistics and an unusually fragile supply system. The physical flow of barrels remains the most important signal for oil’s next move, with sustained improvement in Hormuz traffic likely needed for the geopolitical premium to unwind further.
