Oil prices dropped on Thursday after Saudi Arabia reportedly increased crude oil exports through the Strait of Hormuz, alleviating concerns about supply disruptions caused by recent attacks. Brent crude futures declined by $1.01 to close at $104.82 per barrel, while U.S. West Texas Intermediate (WTI) crude fell 52 cents to settle at $101.91. Despite the pullback, U.S. crude has risen nearly 2% for the week and more than 18% during September.

Following damage to the East-West pipeline from a drone attack last week, Saudi Arabia ramped up crude shipments via ship-to-ship transfers near Oman’s Sohar port to bypass the affected route. These transfers allow crude to be moved through the Strait of Hormuz without risking Iranian attacks in the Gulf. According to Kpler’s Matt Smith, Saudi Arabian crude loadings in its Middle East ports have increased this month, and transfers in the Gulf of Oman rose to 2.7 million barrels per day in September from 1.5 million barrels per day in August.

The pipeline outage forced Saudi Arabia to suspend loadings at its Red Sea terminal at Yanbu and cancel some shipments to Europe, as the terminal has been the main export route since Iranian attacks on vessels in the Strait of Hormuz began earlier this year. U.S. Energy Secretary Chris Wright described the pipeline disruption as temporary and lasting only days, but independent analysts warn the damage could take weeks or months to fix, potentially lowering Saudi crude exports by 400,000 barrels per day this month.

Rapidan Energy noted that the reduction in shipments through Yanbu may be partially offset by increased exports through Hormuz, but stressed that risks of further escalation remain if the pipeline outage extends beyond September or if Iran, the Houthis, or other proxy groups intensify their attacks. The market will be closely watching the situation for any signs of widening conflict and supply interruptions amid ongoing geopolitical tensions in the region.