Oil prices continued to decline following reports that Saudi Arabia is offering Asian buyers additional crude volumes for shipment via Oman. The news eased market concerns about supply shortages amid the situation in the Middle East.
Reuters reported on Thursday, September 17, that Saudi Arabia may increase supplies. The report concerns an offer of additional oil cargoes, rather than a confirmed start or volume of such deliveries.
Brent futures fell by 19 cents, or 0.2%, to $105.64 per barrel. WTI declined by 33 cents, or 0.3%, to $102.10 per barrel. The previous day, both main oil contracts lost about $3 per barrel.
“Concerns about supply shortages have eased somewhat after reports that Saudi Arabia will supply oil via Oman.”
Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment
According to Kikukawa, prices are also being affected by expectations of a possible easing of tensions in the Middle East. Talks between the United States and China scheduled for next week could become an additional factor.
Transshipment near Sohar
Saudi Arabia is offering Asian refiners higher supply volumes through ship-to-ship oil transfers near the port of Sohar in Oman.
This route is intended to partly offset export disruptions following attacks on the East-West pipeline leading to the Red Sea. At the same time, analysts note that the new routes may compensate for only part of the lost volumes.
Brent outlook
In its base-case scenario, DBS Bank expects Brent to stabilize at $85–$95 per barrel in the fourth quarter if tensions in the region ease.
The report also states that Trump accused Iran of attacking Saudi Arabia’s oil pipeline. No details of the accusation, evidence, or reaction from the parties were provided.
