Oil cheapens for third day amid easing supply risks

Global oil prices fell for a third consecutive session on September 18, as fears of an immediate supply shortage from the Middle East eased somewhat. In morning trading, Brent dipped below $104 per barrel, while US WTI was trading near $100-101.

Over the previous two sessions, Brent lost more than 3%. On Friday, the decline continued, with the global benchmark weakening to about $102-103 per barrel at times.

One of the main factors was improved expectations for Saudi Arabian exports. The Kingdom is working to restore the damaged East-West pipeline, which transports crude from fields in the country's east to the Red Sea coast, bypassing the Strait of Hormuz.

The Saudi side expects to restore about half the capacity of the damaged section within the coming days. The halt of this route had previously heightened export concerns and was one of the factors behind the sharp rise in oil quotations.

Additionally, the market is reacting to the fact that tanker traffic through the Strait of Hormuz has not completely stopped. Some vessels continue to pass through the strategic route, which traditionally carries a significant portion of the world's seaborne oil supplies.

At the same time, the geopolitical premium in prices remains high. Investors await a new round of diplomatic contacts regarding the US-Iran war during the UN General Assembly in New York next week.

US President Donald Trump told Axios that he is approaching a "big decision" on further actions against Iran. Before that, he plans to meet with the leaders of six Persian Gulf states - Saudi Arabia, the UAE, Qatar, Bahrain, Kuwait, and Oman.

The market is closely watching these talks, as a new large-scale escalation could again threaten the region's oil infrastructure and shipping through the Strait of Hormuz.

Despite the three-day decline, oil remains significantly more expensive than at the start of the year. Brent has risen about 70% since January due to Middle East conflicts and supply disruptions.

High raw material prices continue to pressure fuel costs and exacerbate inflation risks. Therefore, even a partial restoration of Saudi Arabia's alternative routes is now perceived by traders as a factor that can reduce the risk of a new shortage.

Based on materials from: Bloomberg, MarketWatch, Axios