Oil prices fell for a third consecutive session on Friday as expectations of recovering Middle East supply outweighed concerns about the widening US-Iran conflict.
Brent crude futures for November delivery fell around 0.7% to $104.12 per barrel, while West Texas Intermediate crude slipped 0.5% to $101.40 per barrel.
Despite ongoing geopolitical risks, traders focused on signs that disrupted oil flows from the region could gradually return.
Oil Prices Extend Decline
The latest decline came even as fighting between Saudi Arabia and Yemen’s Iran-backed Houthi movement added fresh uncertainty to the energy market.
The conflict has already disrupted shipping through the Strait of Hormuz, one of the world’s most important routes for oil exports.
However, markets appeared more focused on the possibility that Saudi Arabia could restore part of the capacity of its East-West pipeline.
The pipeline was damaged by drone attacks during the previous week.
Saudi Arabia Works to Restore Oil Flows
Saudi Arabia’s East-West pipeline transports crude oil across the country to Yanbu on the Red Sea coast.
According to media reports, Riyadh is working to restore roughly half of the pipeline’s capacity within days.
A partial recovery would provide an alternative export route and could reduce some of the pressure caused by disruptions around the Strait of Hormuz.
Saudi Arabia has also reportedly offered additional crude cargoes to Asian refiners through ship-to-ship transfers near Oman’s Sohar port.
These measures could help replace some of the barrels currently affected by regional shipping disruptions.
Strait of Hormuz Risks Remain High
Despite the potential improvement in supply, the outlook remains highly uncertain.
Iran’s Revolutionary Guards Navy said a Togo-flagged tanker was struck on Friday while attempting what it described as an illegal passage through the Strait of Hormuz, according to Iranian state media.
Such incidents continue to highlight the risks facing commercial vessels operating in the region.
Any further disruption to tanker traffic could quickly increase concerns about global oil availability.
Diplomacy Becomes Key Driver for Crude Oil
Diplomatic developments are also becoming increasingly important for the oil price outlook.
US President Donald Trump told Axios that he was approaching a major decision over whether to resume large-scale military action against Iran.
He is also expected to meet leaders from Saudi Arabia, the United Arab Emirates, Qatar, Bahrain, Kuwait and Oman on the sidelines of the United Nations General Assembly in New York, according to Axios.
Traders will be watching these talks closely for signs of either escalation or de-escalation.
China Pushes for Restraint
China has also increased its diplomatic involvement.
Chinese Foreign Minister Wang Yi called on Washington and Tehran to exercise restraint and support the reopening of the Strait of Hormuz.
Meanwhile, Iranian Foreign Minister Abbas Araghchi held consultations with officials from China and Pakistan.
Any progress toward reducing tensions could ease the geopolitical risk premium currently built into crude oil prices.
Brent and WTI Remain Above $100
Despite three consecutive sessions of losses, both major oil benchmarks remain above $100 per barrel.
The US-Iran conflict has pushed energy prices sharply higher as traders assess the potential impact on global supply.
For now, the market is balancing two competing forces.
On one side, geopolitical tensions and risks to the Strait of Hormuz continue to support crude prices. On the other, Saudi efforts to restore supply and growing diplomatic activity are helping ease some of those concerns.
Oil traders are likely to remain focused on Middle East supply, the Strait of Hormuz, Saudi production routes and diplomatic developments for the next major move in crude prices.
