International crude oil prices have crashed, erasing gains during the last week. On Friday, Brent crude fell to 102 dollars a barrel, WTI crashed to 100 dollars/barrel while Murban stayed around 121 dollars.
Similarly, OPEC crude oil is also trading at 124 dollars per barrel today. Therefore, the chances of the crude oil price crossing 125 dollars a barrel have diminished as ease in Saudi oil supply and the US-Iran war undeclared ceasefire.
Oil prices ease as Saudi export routes offset Middle East supply fears
Oil prices declined on Friday as expectations of additional Saudi crude supplies reaching international markets eased concerns over renewed regional attacks. Brent crude futures fell 0.74% to $102 per barrel.
Meanwhile, West Texas Intermediate (WTI) crude futures rose $4.70, or 4.65%, to $96.46 per barrel by 9:42am PST. Saudi Arabia and Yemen’s Houthis exchanged fresh attacks across their border on Thursday, raising concerns about further energy supply disruptions. The escalating conflict has already affected regional energy markets following US and Israeli strikes on Iran in February.
However, reports that Saudi Arabia secured alternative routes through Oman for some crude shipments to Asian buyers eased supply concerns. These arrangements reduced fears surrounding a key pipeline closure after Houthi attacks disrupted Saudi oil infrastructure.
According to Simon-Peter Massabni, head of business development at XS.com, the recent price decline reflects a partial reversal of the geopolitical risk premium. He told CNBC that improved Saudi export logistics reduced the amount of supply traders considered vulnerable to disruption.
Furthermore, oil prices increasingly reflect the perceived risk of future disruptions rather than only the volume of crude currently available.
Despite the decline, regional energy infrastructure remains vulnerable to additional attacks and supply interruptions. Market participants continue monitoring developments around the Strait of Hormuz, export routes and major oil terminals.
Meanwhile, the restoration pace of Saudi Arabia’s East-West pipeline remains an important factor for global oil markets. Traders are therefore assessing whether alternative export routes can continue limiting supply risks as tensions across the region remain elevated.
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