Oil Prices Slip 1% but Hold Above $100 as Supply Risks Persist

By Adedapo Adesanya

Oil prices settled about 1 per cent lower on Saturday, but ​stayed above $100 a barrel, as investors weighed the disruption from strikes by Saudi Arabia and Yemen’s Iran-backed Houthis against reports ‌that additional Saudi crude barrels could reach global markets and ease supply concerns.

Brent crude futures traded at $104.82 per barrel after losing $1.01 or 0.95 per cent, and US West Texas Intermediate futures fell by 52 cents or ​0.5 per cent to $101.91 a barrel.

Saudi Arabia and Yemen’s Iran-backed Houthis exchanged fresh strikes across their border this week, with the spread of the Middle East war to Yemen and Saudi Arabia threatening to worsen the global energy supply shortage caused since the US and Israel attacked Iran ​in February.

Saudi Aramco has told European term customers they will receive no Saudi crude in October, even as the kingdom pushes roughly 60 million barrels back through the Persian Gulf after damage to its East-West pipeline.

At least two European refiners were told their October allocations are zero, Bloomberg reported Friday. People familiar with the decision said it applies to all European term buyers.

While Saudi Aramco seems to have found a way to move some of the crude that was stranded by the East-West pipeline, Europe is on the wrong side of the workaround. Saudi Arabia was offering more ​crude cargoes to Asian refiners through ship-to-ship transfers off Oman’s Sohar port.

The East-West pipeline had been moving 4 million to 5 million barrels per day across Saudi Arabia to Yanbu, bypassing the Strait of Hormuz. The pipeline attack stopped that flow, and Europe was left scrambling.

Market analysts noted that the physical market remains tight, limiting the potential for further price declines. Meanwhile, tanker traffic through the Strait of Hormuz continues to fall, while tensions between Saudi Arabia and the Houthis keep Red Sea shipping and regional energy infrastructure vulnerable to renewed disruptions.

French President Emmanuel Macron is calling the G7 back to the table to discuss another release of emergency oil stocks as Europe loses Saudi crude deliveries and diesel prices push deeper into record territory.

Macron said Friday that he will convene G7 countries in the coming weeks to coordinate stock levels, exports and production capacity and consider tapping strategic reserves. France is also working to secure diesel, jet fuel and natural gas supplies for the coming months.

A Ukrainian drone attack damaged a refinery in the Russian city of Yaroslavl, causing a fire that was later extinguished. Earlier this week, President Donald Trump said in a post on Truth Social that Ukraine has agreed not to hit Russian Energy targets.