Crude Drops as Extra Saudi Oil Via Oman Eases Jitters

Key Moments

Brent crude futures traded at $107.92 and U.S. WTI at $104.42 a barrel as prices declined following reports of extra Saudi cargoes via Oman.
Saudi Arabia has been offering additional crude loadings to Asian refiners through ship-to-ship transfers off Oman’s Sohar port after drone attacks hit its key Red Sea pipeline.
U.S. crude stocks rose by 7.1 million barrels in the week ended September 11, sharply diverging from expectations for a 1.6 million barrel draw.

Market Overview

Oil prices slipped on Wednesday as indications that Saudi Arabia is making more crude available through Oman eased worries about the extent of supply disruptions in the Middle East.

By 0801 GMT, Brent crude futures were lower by 83 cents, or 0.76%, at $107.92 a barrel. U.S. West Texas Intermediate (WTI) futures fell $1.41, or 1.33%, to $104.42 a barrel.

In the prior session, both benchmarks had settled more than $3 higher after shipping industry sources said crude loadings at Saudi Arabia’s Yanbu export terminal on the Red Sea had been halted and that Riyadh had canceled some deliveries to European buyers. Those developments had intensified fears that disruptions to a key export channel might last for weeks.

Saudi Supply Rerouted via Oman

Market concerns were partially alleviated after indications emerged that Saudi Arabia is redirecting some supply. According to people familiar with the situation, the kingdom is offering additional crude cargoes to Asian refiners through ship-to-ship transfers off the port of Sohar in Oman. This move follows drone attacks that damaged a major Saudi pipeline running to the Red Sea.

“News around Saudi Arabia exporting from the Gulf suggests concerns that the disruption could be larger are easing,” said UBS analyst Giovanni Staunovo.

Strait of Hormuz Flows and Regional Tensions

Preliminary shipping data showed visible vessel passages through the Strait of Hormuz remained very low. On Tuesday, only four vessels transited the strait, down from seven the previous day and well below the 10-day average of 18.

The waterway handled a fifth of the world’s oil and liquefied natural gas supply before the U.S.-Israeli war on Iran began in late February.

Analysts at Macquarie noted that flows of crude, condensate and refined products through the Strait of Hormuz have held up despite heightened conflict in the area and may have increased to more than 7.5 million barrels per day since hostilities resumed on August 30. They added that the relationship between developments in the strait and oil flows has weakened.

Citi expects ongoing tensions in the Middle East to keep crude and refined product prices supported in the near term. The bank said in a note that it anticipates the Strait of Hormuz will eventually reopen in the fourth quarter of 2026, aided by diplomatic efforts in the region.

Diesel Market Tightness in Europe

European diesel futures underscored the strain in refined fuel markets. Contracts settled at a record high and climbed to their strongest intraday level since April on Tuesday, reflecting supply tightness as Middle East disruptions curbed flows of both crude and refined products.

“I would expect, unless there is a peace deal or an improvement in the situation in Russia, that diesel prices stay supported,” Staunovo said.

Price and Flow Snapshot

Instrument / Metric	Level / Value	Context
Brent crude futures	$107.92 per barrel	Down 83 cents, or 0.76%, at 0801 GMT
WTI crude futures	$104.42 per barrel	Down $1.41, or 1.33%, at 0801 GMT
Strait of Hormuz vessel transits (Tuesday)	4	Down from 7 a day earlier; below 10-day average of 18
Flows through Strait of Hormuz	>7.5 million barrels per day	Estimate since fighting resumed on August 30
European diesel futures	Record settlement	Highest intraday level since April on Tuesday
U.S. crude inventories	+7.1 million barrels	Week ended September 11 (API data)
Analyst expectation for U.S. crude stocks	-1.6 million barrels	Reuters poll forecast for the same week

U.S. Stock Build Adds Additional Pressure

On the fundamentals side, U.S. inventory data also weighed on prices. Market sources, citing figures from the American Petroleum Institute (API), said that crude oil, gasoline and distillate stocks all increased last week.

Crude inventories rose by 7.1 million barrels in the week ended September 11, compared with analyst expectations for a draw of about 1.6 million barrels in a Reuters poll.

Haitong Futures noted in a report that the unexpected builds in gasoline and diesel stocks, as reflected in API’s data, have pressured prices. However, the firm added that these regional increases do not alter the underlying tightness in the global crude market.