By Kanoko Matsuyama and Charles Gorrivan
Sep 17, 2026 (Bloomberg) – Oil prices have continued to fall as it seems that supply issues in the Middle East are starting to improve. Saudi Arabia is working to partially restore operations on an important pipeline.
Brent crude is trading around $102 a barrel after a drop of 2.7% on Wednesday, while West Texas Intermediate is below $100. Saudi Arabia aims to bring back about half of the capacity of its key East-West pipeline in just a few days, after it was shut down last week due to drone strikes. At the same time, Saudi Arabia has sold more oil to Asian refiners for collection just outside the Strait of Hormuz.
However, risks still exist as the US-Iran conflict continues to disrupt Middle Eastern energy supplies and the ongoing Russia-Ukraine war adds to market worries. Traders are keeping a close eye on the Houthi militants in Yemen, who are advancing toward the crucial Bab el-Mandeb Strait and have increased attacks on Saudi oil and shipping assets.
Oil prices continued to drop on Thursday after Reuters reported that China has asked Iran to help control the Houthi militants.
“The partial reopening of the East-West pipeline and Saudi oil shipments through the Strait of Hormuz via ship-to-ship transfers are bearish for crude in the short term, but the market is still on edge as long as the Houthi conflict continues,” said Arne Lohmann Rasmussen, chief analyst at Global Risk Management in Copenhagen.
Crude prices have surged more than 70% this year, adding to inflationary pressures that led the Federal Reserve to raise interest rates on Wednesday and suggest further tightening. Some inflation-linked trading reversed on Thursday, with stocks rising and Treasury yields falling along with oil prices.
The drop in oil prices on Thursday also reflects some profit-taking after two weeks of increases.
“We see this as a buying opportunity for crude and refined products,” Lohmann Rasmussen noted. “Prices have dipped, but the underlying risks to supply remain.”
The East-West pipeline, which transports oil across Saudi Arabia to the Red Sea, was damaged in last week’s attacks, contributing to higher prices. This route provides a crucial alternative to shipments that go through the contested Strait of Hormuz.
Estimates for oil volumes passing through Hormuz vary. US Energy Secretary Chris Wright mentioned that 18 million barrels of crude and products were transported just a day earlier this week, with a seven-day average of 11 million barrels daily. Clarksons Research estimates daily flow at about 8 million barrels.
President Donald Trump is scheduled to meet with leaders from the Persian Gulf next Tuesday in New York during the UN General Assembly to discuss strategies regarding the ongoing conflict, according to Axios.
| Prices: |
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| Brent for November settlement fell 3.3% to $102.33 a barrel at 1:17 p.m. in London. WTI for October delivery dropped 2.6% to $99.75 a barrel. |
In the US, Congress has approved a bill granting Trump new powers to impose tariffs on countries purchasing Russian oil products, which may include China and India. This legislation will soon be sent to the president for approval and has been welcomed by Ukrainian officials who are seeking evidence of US support against Russia's invasion.
Kyiv has been targeting Russian refineries with drone attacks for months, prompting Moscow to ban most diesel exports to favor local supplies. Officials are considering extending this restriction into October, which has caused US retail prices of diesel fuel to rise to record levels.
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