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Source: Newsmaker.id
Global oil prices weakened again during Friday's trading (Sept. 18), marking a third consecutive day of decline as concerns regarding supply disruptions from Saudi Arabia began to subside. Brent crude fell to US$103.85 per barrel, while West Texas Intermediate (WTI) eased to US$101.25 per barrel. Despite the pullback, prices remained above the US$100 mark as the market stayed wary of developments in the Middle East conflict.
Downward pressure on oil prices emerged after the market perceived a possibility of supply recovery from Saudi Arabia. Previously, prices had surged toward four-month highs following a disruption to the East-West pipeline, which sparked fears regarding Saudi oil exports. However, reports that Saudi Arabia was working to restore approximately half of the pipeline's capacity within a few days helped alleviate supply concerns.
In addition to energy infrastructure recovery, Saudi Arabia reportedly offered additional crude oil shipments to Asian buyers via ship-to-ship transfers near Oman. This move signaled that the energy market still had alternative supply options, even though the risk of disruption in the Middle East had not entirely vanished.
On the other hand, the Middle East conflict remains a primary factor keeping oil prices elevated. Saudi Arabia and the Iran-backed Houthi group have engaged in renewed cross-border attacks, widening the scope of conflict risk in the region. Tensions also escalated after Iran reported an incident involving a Togo-flagged oil tanker near the Strait of Hormuz, a vital artery for global energy trade.
Oil price movements throughout the week have been highly volatile. Prices spiked initially due to supply disruption fears before correcting downward as the market anticipated a normalization of Saudi oil flows. However, investors are still awaiting concrete evidence that energy distribution has truly stabilized, particularly regarding the condition of pipelines and shipping traffic in this strategic region.
Newsmaker Analysis: The current decline in oil prices reflects a reduction in short-term supply pressure rather than the disappearance of geopolitical risks. As the Middle East conflict persists and energy routes like the Strait of Hormuz remain at risk, oil prices have the potential for significant volatility. Markets will continue to closely monitor diplomatic developments involving Iran, the restoration of Saudi oil facilities, and the stability of global energy distribution.