Global oil prices fell on Wednesday after an unexpected increase in U.S. crude oil inventories outweighed investor concerns over potential supply disruptions following attacks on Saudi Arabia’s oil infrastructure.
Brent crude futures fell 93 cents, or 0.86%, to $107.82 a barrel, while U.S. West Texas Intermediate (WTI) crude dropped 97 cents, or 0.92%, to $104.86 a barrel during early trading. The decline followed a sharp rally a day earlier that pushed both benchmarks to their highest levels since May amid escalating tensions in the Middle East.
Market sentiment shifted after the American Petroleum Institute (API) reported an unexpected 7.1 million-barrel increase in U.S. crude inventories for the week ending September 11. Analysts surveyed by Reuters had expected a drawdown of about 1.6 million barrels, making the larger-than-expected stock build a bearish signal for oil prices.
The inventory data came despite continuing concerns over Saudi Arabia’s oil exports after Iran-backed Houthi fighters targeted the kingdom’s East-West Pipeline and facilities linked to the Red Sea export hub at Yanbu. The attacks forced Saudi Arabia to suspend oil loadings at Yanbu and reroute some crude shipments through Oman’s Sohar port using ship-to-ship transfers.
The East-West Pipeline is one of Saudi Arabia’s most important export routes because it allows crude oil to bypass the Strait of Hormuz. Energy analysts have warned that prolonged disruptions to the pipeline could threaten up to 4% of global oil supply, although Saudi authorities have sought alternative export routes to reduce the immediate impact on international markets.
Despite Wednesday’s decline, crude prices remain significantly above levels seen before the latest escalation in the U.S.-Iran conflict. Traders continue to monitor the security of the Strait of Hormuz and the Red Sea shipping corridor, where regional attacks have heightened concerns over global energy supplies and maritime transport.
