Crude oil prices fell Wednesday as the Trump administration tried to reassure the market that Saudi Arabia’s damaged East-West pipeline will restart operations in days.
U.S. West Texas Intermediate futures were down 1.6% to $104.09 per barrel by 8:57 a.m. ET. Brent
crude, the international benchmark, traded 1.1% lower to $107.57 per barrel. Prices have rallied around 20% this month as fighting has sharply escalated in the Persian Gulf.
Energy Secretary Chris Wright told the media on Tuesday that the pipeline outage is a “brief and temporary interruption” that “will be measured in days.”
But independent analysts warned the pipeline could remain down for weeks based on satellite images showing significant damage to a pumping station.
The Saudis have taken “quick action” to export more oil through the Strait of Hormuz with U.S. military help while the pipeline is down, Wright said.
Four supertankers that can carry eight million barrels total were observed loading at Saudi’s Persian Gulf ports of Ras Tanura and Juaymah on Tuesday, said Matt Smith, director of commodity research at Kpler.
Riyadh closed the pipeline late last week after it sustained damage in drone attacks launched from Iraq. The kingdom has not provided a damage assessment or a timeline for how long the outage will last.
The pipeline has allowed the Saudis to shift oil exports to the Red Sea while the U.S. and Iran battle for control over Hormuz. The strait was the Gulf states’ main export corridor before the war.
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