Oil prices fall after U.S. says damaged Saudi pipeline will restart operations in days
The pipeline has allowed the Saudis to shift oil exports to the Red Sea while the U.S. and Iran battle for control over Hormuz.
AbJimroe
Crude oil prices fell Wednesday as the Trump administration tried to reassure the market that Saudi Arabia's damaged East-West pipeline will restart operations in days.
U.S. West Texas Intermediate futures were down 1.6% to $104.09 per barrel by 8:57 a.m. ET. Brent crude, the international benchmark, traded 1.1% lower to $107.57 per barrel. Prices have rallied around 20% this month as fighting has sharply escalated in Persian Gulf.
Energy Secretary Chris Wright told CNBC on Tuesday that the pipeline outage is a "brief and temporary interruption" that "will be measured in days."
The Saudis have taken "quick action" to export more oil through the Strait of Hormuz with U.S. military help while the pipeline is down, Wright said.
But independent analysts warned the pipeline could remain down for weeks based on satellite images showing significant damage to a pumping station.
Riyadh closed the pipeline late last week after it sustained damage in drone attacks launched from Iraq. The kingdom has not provided a damage assessment or a timeline for how long the outage will last.
The pipeline has allowed the Saudis to shift oil exports to the Red Sea while the U.S. and Iran battle for control over Hormuz. The strait was the Gulf states' main export corridor before the war.
The U.S. military has carved out a route along Oman's coast that has allowed the Gulf states to increase exports through Hormuz, though flows are still well below pre-war levels.
The journey remains dangerous even with U.S. protection as Iran continues to attack tankers. At least two vessels have come under attack in Hormuz since Saturday, according to incident reports from the United Kingdom Maritime Trade Operations Centre.
