Oil Falls for Second Day on Saudi Pipeline Repair Hopes; WTI Near $102

International oil prices fell for a second straight day as concerns over Middle East supply disruptions eased on expectations that Saudi Arabia’s key pipeline will be restored and as crude shipments through the Strait of Hormuz increased.

Bloomberg reported on September 16 that West Texas Intermediate fell to near $102 a barrel. It slid 3.2% a day earlier, its biggest one-day drop in more than six weeks since August 4. Brent also settled below $106 a barrel.

Expectations for repairs to Saudi Arabia’s East-West Pipeline also weighed on prices. Saudi Arabia is reportedly working to restore about half of the damaged pipeline’s transport capacity within days and return it to full operations in about six weeks.

The East-West Pipeline is a key facility that transports crude from eastern Saudi Arabia to the Red Sea coast. Its role as an alternative route has grown as uncertainty around the Strait of Hormuz persists amid tensions between the US and Iran.

Crude transport through the Strait of Hormuz has also shown signs of a partial recovery. US Energy Secretary Chris Wright said earlier this week that 18 million barrels a day of crude and petroleum products passed through the strait. The average over the past seven days was about 11 million barrels a day.

International oil prices have risen about 75% this year, driven by Middle East supply disruptions stemming from a US-Iran war and the prolonged Russia-Ukraine war. The surge in crude and fuel prices has added to global inflation pressures and influenced interest-rate increases by the Federal Reserve.

The Fed raised its benchmark interest rate by 0.25 percentage point a day earlier and signaled the possibility of additional tightening later this year.