Oil prices decline amid Saudi Arabia’s pipeline repair plans

Global oil prices, including Azerbaijan's Azeri Light grade, declined amid news of Saudi Arabia's plans to quickly restore the East-West main oil pipeline, which was damaged in a drone attack. Market sentiment was further influenced by US commercial crude stock data, which showed a smaller-than-expected draw.

The price of a barrel of Azeri Light on a CIF basis at the Italian port of Augusta fell by $5.88, or 4.59%, to $122.15. On an FOB basis at the Turkish port of Ceyhan, the price of Azeri Light dropped by $5.83 (4.76%) to $116.62 per barrel. Meanwhile, the benchmark Dated Brent lost $5.73 (4.33%), falling to $126.46 per barrel, while the price of Urals crude plunged by $7.44 (7.82%) to $87.70 per barrel. Azerbaijan's 2026 state budget projects an average oil price of $65 per barrel.

According to Trading Economics, after a sharp drop in the previous session, benchmark crude quotes are trading around $102 per barrel on Thursday. Prices were pressured by reports that Saudi Arabia intends to restore about half of the East-West pipeline's capacity within a few days and return to full operation within six weeks. The pipeline provides an alternative route bypassing the Strait of Hormuz and was damaged by drone strikes last week.

At the same time, Saudi Arabia, assisted by the US military, stepped up efforts to transport crude oil through the Strait of Hormuz. According to US Secretary of Energy Chris Wright, 18 million barrels of crude oil and petroleum products were shipped through the strait earlier this week.

According to official US data, commercial crude inventories in the country fell by 640,000 barrels to 423.4 million barrels. This draw was smaller than market experts predicted and differed significantly from preliminary estimates by the American Petroleum Institute (API), which indicated a potential inventory build of 7.1 million barrels.

Source: news.milli.az

Prepared by:Abdulrahman Sadikhli