Oil prices are falling on Wednesday after U.S. inventories surprisingly rose and Saudi Arabia offered to reroute exports through Oman.
Brent crude, the international benchmark, dropped 1.29% and clocked in at $107.25 per barrel at 8:29 a.m. ET, while West Texas Intermediate, the U.S. benchmark, fell more than 2% and stood at $103.65 per barrel at the same time.
Reuters detailed that U.S. crude oil, gasoline and distillate inventories rose last week, according to figures from the American Petroleum Institute.
The outlet had noted that oil prices had climbed on Tuesday after shipping industry sources said loadings at Saudi Arabia's port of Yanbu had been suspended and the country cancelled some deliveries to European customers. The country's key East-West pipeline has also been shut down since last Friday after sustaining multiple hits.
The development deepened concerns about oil flows through the Middle East, but they were somewhat eased by Riyahd's offer of ship-to-ship oil transfers off Oman's Sohar port. Also, U.S. Energy Secretary Chris Wright said the repair of the pipeline will take days, rather than weeks, to resume pumping.
Speaking to CNBC, Wright said "this will be a brief and temporary interruption" that will be "measured in days."
Riyahd's ability to reopen the pipeline will be key for the already strained global energy industry, considering that about 4% of the global oil supply flows through it.
Wright's assessment differs from a source familiar with the matter who earlier this week told Reuters that that Riyadh could take up to six weeks to fix the pipeline if it doesn't get hit again. Another estimate claimed that the work could take less and partial pumping could resume as well.
Hostilities between Saudi Arabia and Iran-backed Houthi rebels in Yemen have continued in the meantime. Riyadh said on Wednesday that it intercepted and destroyed a Houthi drone before it could enter the airspace over Mecca, calling it a "deliberate act intended to provoke the feelings of millions of Muslims." A spokesperson for the Saudi-led coalition that has been clashing with the Houthis since 2015 said the holy city for Islam is a "red line." The Houthis rejected the claim, calling it a "worn-out lie that has been used before and no longer fools anyone."
