Oil Plunges as Market Calms Regarding Saudi Supply

Oil prices fell sharply during Wednesday's trading (Sept. 16) after Saudi Arabia reportedly offered additional crude oil cargoes via Oman, easing some concerns about supply disruptions in the Middle East. Brent dropped US$2.92, or 2.7%, to US$105.83 per barrel, while WTI fell US$3.40, or 3.2%, to US$102.43 per barrel.

Saudi Arabia offered additional shipments to Asian refineries through a ship-to-ship transfer scheme near the Port of Sohar, Oman. This move helped mitigate the impact of disruptions to the Saudi East-West pipeline, which had previously raised market concerns regarding global oil availability.

Oil prices had previously surged by more than US$3 after loading operations at the Port of Yanbu were halted and some shipments to European customers were cancelled. Yanbu serves as a vital route for Saudi exports following disruptions to flows through the Strait of Hormuz caused by regional conflict.

Newsmaker Analysis: The correction in oil prices indicates that the risk premium is beginning to subside now that Saudi Arabia has found alternative shipping routes. However, until the East-West pipeline and the Strait of Hormuz return to full normalcy, volatility in Brent and WTI prices is likely to remain high.

Source: Newsmaker.id