Oil prices edged lower in Asian trading on Thursday as reports of additional Saudi crude shipments through Oman eased some concerns over supply disruptions.
Brent crude futures fell 19 cents, or 0.2 percent, to $105.64 a barrel by 0347 GMT. US West Texas Intermediate (WTI) crude dropped 33 cents, or 0.3 percent, to $102.10 a barrel.
Both benchmarks lost around $3 in the previous session as traders responded to signs that some disrupted Saudi supplies could be redirected.
Saudi Arabia is offering additional crude cargoes to Asian refiners through ship-to-ship transfers near Oman’s Sohar port, according to people familiar with the matter. The move could help make up part of the supply affected by damage to the kingdom’s East-West pipeline.
The pipeline carries crude to Saudi Arabia’s Red Sea export terminal at Yanbu. Attacks on the system have disrupted flows and contributed to a sharp rise in oil prices earlier this week.
However, the additional shipments are not expected to fully replace the lost volumes. Analysts at Saxo Bank said increased flows through the Strait of Hormuz were only partly making up for the disruption caused by the attacks.
Oil prices had climbed to around four-month highs after reports that crude loadings at Yanbu had been halted and some Saudi shipments to European buyers were cancelled.
The wider conflict is also keeping traders cautious. The Strait of Hormuz remains a key concern because it previously carried about one-fifth of global oil supplies before Iran began restricting shipping through the route following US and Israeli attacks.
Two pumping stations linked to the East-West pipeline were also damaged, with no clear timeline yet for full repairs, according to oil and security sources.
Fighting in the region has added to the uncertainty. Saudi Arabia carried out airstrikes in Yemen, while Houthi fighters reported launching drones and missiles towards Saudi cities.
DBS Bank expects Brent to settle between $85 and $95 a barrel in the fourth quarter if tensions between the US and Iran ease. However, it warned that continued attacks around the Strait of Hormuz and the Red Sea could push prices towards $120 before they eventually retreat.
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