Market Reaction

Brent crude futures for November settled at $105.41 a barrel, down 3.1%, while U.S. West Texas Intermediate (WTI) October contracts settled at $102.02 a barrel, down 3.6%. Despite these declines, both benchmarks remained up for the week, with Brent gaining 6.1% and WTI 8.1% since the start of the week.

Supply Disruption Context

The price pull‑back followed reports that Saudi Arabia’s key East‑West pipeline, which had been shut after drone attacks by Iran‑backed Houthis, is slated to restart at roughly half its normal capacity within a few days, according to a Bloomberg source familiar with the matter. Reuters had earlier reported that Saudi authorities suspended crude loadings at Yanbu port, and that Libya halted production at three oilfields, adding to global supply worries.

In response, Saudi officials are reportedly offering additional crude loadings to Asian refiners via ship‑to‑ship transfers off Oman’s Sohar port. Traders remain cautious as the Houthis continue to seek control over western Yemen and the Bab el‑Mandeb Strait, while U.S.–Iran tensions keep the Strait of Hormuz a contested chokepoint.

Macquarie energy strategist Walt Chancellor noted that oil flows through the Strait of Hormuz may have risen to over 7.5 million barrels per day since the August 30 resumption of hostilities, suggesting that despite geopolitical risk, physical oil movements have not been severely curtailed.

U.S. Inventory and Export Data

U.S. Energy Information Administration (EIA) data for the week ending 11 September showed commercial crude inventories (excluding the Strategic Petroleum Reserve) fell by 700,000 barrels to 423.4 million barrels, a decline less steep than the 1.6 million‑barrel drop analysts had expected. Including the SPR, total U.S. crude and product inventories declined by 1 million barrels to 708.4 million barrels, marking the lowest level recorded since February 1984.

During the same week, U.S. exports of crude oil and refined fuel products reached 12.39 million barrels, the highest weekly export figure since early June, providing additional support to global supply and contributing to the easing of price pressures.

Analyst Commentary

The combination of a potential partial restart of Saudi pipeline capacity, continued high‑risk geopolitics in the Gulf, and softer-than‑expected U.S. inventory draws created a mixed backdrop that halted the earlier weekly rally in oil prices. While supply‑side concerns remain, the modest increase in export volumes and the possibility of resumed Saudi crude flows have tempered further upside.