Oil slips after Saudi seeks alternative export routes

Oil prices declined for a third straight day on Friday as Saudi attempts to seek alternative export routes eased supply concerns despite a widening of the US-Iran war.

Saudi Arabia is shuttling crude through the Strait of Hormuz for transfer off Oman, following the closure of its vital East-West pipeline, AGBI reported.

The East-West pipeline, shut due to strikes by Yemen’s Iran-backed Houthis, is also expected to reopen soon.

Brent crude futures lost 79 cents, or 0.75 percent, to $104 a barrel by 03:19 GMT, while US West Texas Intermediate futures declined by 70 cents, or 0.69 percent, to $101.20.

Both benchmarks closed 1 percent lower on Thursday.

Riyadh plans to restore the East-West pipeline to about half capacity soon, Bloomberg reported, citing an unidentified source.

US energy secretary Chris Wright said on Wednesday that crude should be flowing through the pipeline “within days”, CNBC reported.

Further reading:

• Diesel prices likely to stay high into next year
• Reality of war tests Saudi hopes for southern tourism
• US counts steep cost of war damage to its Gulf assets

Wright added that Saudi crude that is not going through the pipeline would pass through the Strait of Hormuz with support from the US military.

Iran’s Islamic Revolutionary Guard Corps struck the Trend tanker, flying the flag of Togo, while the ship was conducting what Tehran considered to be an illegal transit through the strait, the Iranian state-run IRNA news agency reported.

Only four vessels transited the strait on Thursday, down from six a day earlier, Reuters reported, citing preliminary shipping data.

Saudi Arabia’s benchmark stock index closed flat on Thursday despite fresh strikes traded by Riyadh and the Houthis.

Dubai’s stock exchange added 0.3 percent, while Abu Dhabi gained 0.5 percent.

The main Qatari index rose 0.2 percent and Oman gained 0.7 percent, while Bahrain and Kuwait closed lower.