International Oil Prices Fall for Second Day Amid Saudi Pipeline Repairs Expectations

International oil prices continued their two-day decline as expectations of repairs to Saudi Arabia's key pipeline and increased oil shipments through the Strait of Hormuz eased Middle East supply disruption fears. According to Bloomberg on Thursday, West Texas Intermediate (WTI) crude fell to the $102 per barrel level. The previous day saw a 3.2% drop, marking its largest single-day decline since August 4 after six weeks. Brent crude also closed below $106 per barrel.

The oil price decline was influenced by expectations of repairs to Saudi Arabia's East-West Pipeline. Saudi Arabia reportedly aims to restore about half of the pipeline's transport capacity within days and achieve full normalization within approximately six weeks following last week's attack on the facility. The East-West Pipeline is a critical infrastructure transporting crude from eastern Saudi Arabia to the Red Sea coast. Its importance grew as uncertainty over the Strait of Hormuz intensified due to tensions between the US and Iran, making it a key alternative shipping route.

Oil shipments through the Strait of Hormuz also showed signs of recovery. US Energy Secretary Chris Wright stated that around 18 million barrels per day of oil and petroleum products passed through the strait earlier this week. The average daily throughput over the past seven days was estimated at 11 million barrels.

International oil prices have risen approximately 75% this year due to Middle East supply disruptions stemming from potential US-Iran war and prolonged Russia-Ukraine conflict, contributing to global inflation pressures that influenced Federal Reserve interest rate decisions. The Fed recently raised its benchmark rate by 0.25 percentage points and signaled possible further tightening this year.