Oil prices extended their recent decline on Thursday as Saudi Arabia reportedly moved to ease supply constraints.
However, ongoing tensions across the Middle East continued to support crude prices above $100 per barrel.
Brent and WTI Oil Prices Fall
Benchmark Brent crude futures fell 2.9% to around $102.74 per barrel by 09:52 ET, or 13:52 GMT.
West Texas Intermediate crude futures also moved lower, dropping 2.0% to approximately $100.37 per barrel.
The latest decline follows a strong rally in oil prices that has started to lose momentum this week.
Saudi Arabia Moves to Ease Supply Disruptions
Reports suggest that Saudi Arabia is taking steps to reduce the impact of supply disruptions in the Red Sea.
The disruptions have been linked to Houthi militants in Yemen, who have expanded their presence along the country’s western coastline.
This has increased concerns around the Bab el-Mandeb Strait, a key shipping route connecting the Red Sea with the Gulf of Aden.
The waterway is particularly important for Saudi Arabia because it is used to move oil exports toward international markets.
Saudi Crude Shipments Rerouted Through Oman
Saudi Arabia is reportedly offering additional crude loadings to Asian refiners through ship-to-ship transfers near Oman’s Sohar port.
The strategy could help maintain oil flows despite heightened military tensions and shipping risks in the region.
Saudi Arabia is also working to restore part of its east-west oil pipeline.
According to reports, Riyadh aims to bring roughly half of the pipeline’s capacity back online within days after operations were disrupted by Houthi attacks last week.
UBS analysts said these developments could lead to an increase in Saudi oil exports.
Houthi Talks Raise Hopes for Lower Shipping Risks
Diplomatic developments have also helped ease some concerns surrounding oil supply.
US representatives reportedly met with Iran-backed Houthi officials in Oman over the weekend.
During the talks, the Houthis reaffirmed their commitment to a 2025 ceasefire and indicated that they would avoid attacks on US and Israeli vessels.
Any improvement in shipping security could help reduce the risk premium currently built into crude oil prices.
Iran Peace Talks Remain in Focus
US President Donald Trump also said on Wednesday that Iran was seeking a peace agreement and suggested that the conflict could be moving toward a conclusion.
However, major disagreements between Washington and Tehran remain unresolved.
One of the most important issues is the Strait of Hormuz, where shipping activity remains far below prewar levels.
The strait is one of the world’s most important oil transportation routes, making any disruption a major risk for global energy markets.
Shipping Traffic Remains Severely Reduced
Commodity vessel traffic through the Strait of Hormuz fell sharply on Wednesday.
Only three commodity vessels crossed the waterway, compared with 12 on the previous day, according to Kpler data cited by Reuters.
Traffic through the Bab el-Mandeb Strait also declined.
Crossings fell to 21 vessels from 24 a day earlier.
The reduced traffic highlights the continuing risks to global oil supply despite signs of improving diplomatic conditions.
Oil Prices Remain Supported Above $100
Although oil prices have fallen in recent sessions, crude remains elevated as traders continue to monitor supply risks across the Middle East.
Saudi Arabia’s efforts to restore exports and alternative shipping routes have helped ease some immediate concerns.
However, restricted traffic through the Strait of Hormuz and Bab el-Mandeb means the market remains vulnerable to fresh disruptions.
Traders will continue watching regional diplomacy, shipping flows and Saudi export levels for further direction in oil prices.
