Oil and natural gas facilities are seen along the Houston Ship Channel as Tropical Storm Edouard passes through Greater Houston on Tuesday, September 1, 2026. (Photo by Jason Fochtman/Houston Chronicle via Getty Images)
Jason Fochtman | Houston Chronicle | Getty Images
Oil prices fell on Friday as investors weighed a new strike between Saudi Arabia and Yemen’s Iran-backed Houthis against signs that additional Saudi crude could enter global markets, easing supply concerns.
Brent crude oil futures, the international benchmark, fell 0.94% to $103.83 per barrel. US West Texas Intermediate futures fell 0.88% to $101.01 per barrel.
Saudi Arabia and the Houthis exchanged fresh attacks across the border on Thursday, raising concerns that the escalation of the Middle East conflict could further disrupt energy supplies already strained since the United States and Israel attacked Iran in February.
Still, reports that Saudi Arabia has found another way to deliver some of its crude oil shipments to buyers in Asia via Oman are helping to allay fears of more serious supply disruptions caused by the closure of a major pipeline after the Houthi attack.
Simon Peter Massabuni, head of business development at XS.com, said the recent drop in oil prices reflects a partial easing of the geopolitical risk premium rather than a fundamental change in the oil market.
Improving logistics for Saudi crude exports has reduced the market’s assessment of how much supply is at risk, Masabni said, adding that oil prices reflect not only available barrels but also the potential for supply interruptions.
Still, supply chains in the Middle East remain fragile, and traders are particularly sensitive to developments around the Strait of Hormuz, export routes and oil terminals, he said. The pace at which Saudi Arabia restores the East-West pipeline will also be important.
Masabuni expects oil prices to continue to be more sensitive to geopolitical developments than traditional supply and demand indicators in the short term. Continued flows into Asia from Saudi Arabia and progress in restoring the East-West pipeline could put further downward pressure on prices, while new disruptions to Middle East exports could quickly revive risk premiums.
