Oil prices fell for a second consecutive session on Thursday, September 17, extending Wednesday's roughly $3 decline, as reports that Saudi Arabia is rerouting extra crude cargoes through Oman eased fears of a prolonged Middle East supply disruption.
How Far Prices Have Fallen
Brent crude futures dropped $1.24, or 1.2%, to $104.59 a barrel, while US West Texas Intermediate (WTI) futures fell $1.14, or 1.1%, to $101.29. Both benchmarks remain above $100 a barrel, with oil on track to end the week above that level for the first time since mid-May, even after two straight sessions of declines.
The Saudi Workaround
According to people familiar with the matter, Saudi Arabia is offering additional crude loadings to Asian refiners via ship-to-ship transfers off Oman's Sohar port — a workaround designed to blunt the impact of the earlier Houthi attack on the kingdom's critical East-West pipeline, which had forced a suspension of exports through the Red Sea port of Yanbu. Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment, explained the market reaction: "Concerns over supply tightness eased slightly following news that Saudi Arabia would ship cargo via Oman."
Diplomatic Signals Adding to the Relief
Kikukawa pointed to a second factor supporting the pullback: "Expectations of progress toward easing tensions in the Middle East ahead of the US-China summit next week are also capping price gains." Separately, Iran's president said Tehran and the UAE want to "turn the page" on the broader regional conflict — a modestly conciliatory signal that added to the cautiously improving sentiment, even as the underlying war with the US remains unresolved.
The Backdrop Prices Are Still Reflecting
Despite the two-day pullback, the broader supply picture remains fragile. Just this week, Iran-backed Houthi forces attacked four Saudi cities in an expansion of the conflict, wounding 73 people, and US-Iran attacks had pushed oil to six-week highs before Trump issued a fresh Iran warning that extended those gains further. US diesel prices hit a record high this week, and European diesel futures touched their own record on Tuesday, reflecting persistent tightness in refined-product markets even as crude prices themselves have pulled back slightly.
A Surprising Inventory Build Didn't Stop the Rally From Cooling
Ahead of Thursday's pullback, US crude inventories had actually posted a notable build: according to API data, crude stockpiles rose by 7.1 million barrels in the week ended September 11 — far above the roughly 1.6 million-barrel draw analysts had expected. Despite that inventory surprise, prices had remained resilient earlier in the week, with Priyanka Sachdeva, head of market insights at Phillip Nova, noting that traders were focused instead on physical supply disruptions: "The bigger concern remains the disruption to Saudi Arabia's East-West pipeline and Yanbu export infrastructure, following attacks on Saudi energy facilities."
The Bigger Picture
Thursday's pullback illustrates how quickly oil markets can reprice when a workable supply alternative emerges — even a partial one, like Saudi Arabia's Oman-routed cargoes — without the underlying geopolitical conflict actually being resolved. With Houthi attacks continuing to expand and the East-West pipeline still not fully restored, any disruption to the Oman workaround itself could just as easily send prices back toward their recent highs. For continuing live oil market coverage, see the full Reuters Commodities report.
With oil still on pace to close the week above $100 a barrel despite the pullback, the market's message remains cautious rather than confident — a temporary reprieve from a supply disruption that hasn't actually gone away, just found a workaround.