Crude futures extended their slide on Friday as easing worries over immediate supply disruptions outweighed the prior week's bullish momentum, pushing West Texas Intermediate below the psychologically significant $100 level.
During European morning trading, Brent futures were down 2.6% to $102.14 per barrel, while WTI slipped 2.3% to $99.53. The pullback comes after both benchmarks settled at four-month highs earlier in the week, with Brent at $108.75 and WTI at $105.83.
According to analysts, the decline also reflects profit-taking behavior after two consecutive weekly gains. MUFG noted that market expectations for a recovery in Saudi export capacity have helped ease the immediate supply concerns.
Research analysts at ANZ suggested that the current correction is largely a function of traders locking in gains following the recent run-up, though the geopolitical backdrop remains fluid. Saudi Arabia has yet to announce a timeline for restarting the East-West pipeline, with its energy ministry stating that technical teams are still assessing the line's integrity and will update the public on any progress.
The kingdom shut the pipeline as a precaution after attacks on energy infrastructure. Officials are aiming to restore partial operations within days, but repairs to damaged pumping stations and a full return to capacity could take between six and eight weeks. The pipeline carries crude from eastern oil fields to the Red Sea port of Yanbu, serving as a key alternative export route if shipments through the Strait of Hormuz face disruption.
Security around the region's main oil shipping lanes remains tense. Ship-to-ship transfers through Hormuz offer one alternative, as demonstrated by ADNOC, which has moved crude on its own and chartered vessels under U.S. naval escort, later transshipping cargoes onto other tankers anchored in the Gulf of Oman. However, the safety situation for Saudi Arabia and neighboring shipping routes is still highly volatile, with Iran-backed Houthi forces gaining ground over recent weeks, including capturing an island near the Bab el-Mandeb strait and thereby increasing their capacity to threaten Saudi Red Sea shipments.
While Riyadh focuses on fixing the East-West pipeline, these developments add further risk to its export routes through the Red Sea. At the same time, investors are closely monitoring the trajectory of the U.S.-Iran standoff. MUFG indicated that market participants are now waiting for the next phase of diplomatic maneuvering, with President Trump expected to meet Gulf leaders on the sidelines of the upcoming UN General Assembly.
Meanwhile, Saudi Aramco's well-developed domestic supply chain should help accelerate repairs to damaged infrastructure. According to Rebecca Schultz, a senior oil analyst at the International Energy Agency, roughly 70% of the company's material needs—including pipes, chemicals, and wellhead equipment—are sourced locally.