Oil prices climbed on Friday driven by fresh anxiety over supplies from Saudi Arabia after attacks on the kingdom’s energy facilities cut its production capacity by around 600,000 barrels per day and reduced throughput on its critical East-West Pipeline by about 700,000 bpd, Saudi state news agency SPA reported on Thursday citing an official source at the Ministry of Energy . Brent crude futures added 58 cents or 0.60% to $96.50 a barrel as of 0338 GMT, while West Texas Intermediate futures were up 49 cents or 0.50% at $98.36 a barrel, extending gains from a volatile Thursday session . Despite the uptick, both contracts have so far lost 11% for the week, marking the biggest weekly decline since June 2025 as markets processed the implications of a fragile two-week ceasefire between the US and Iran . “The initial wave of relief following President Trump’s two-week ceasefire announcement has quickly given way to underlying doubts,” IG market analyst Tony Sycamore said in a note .
The Saudi production cuts represent a significant blow to global supply at a time when the market was already adjusting to the prospect of renewed flows through the Strait of Hormuz. The drop in East-West pipeline throughput “weakens Saudi’s Hormuz bypass strategy and highlights persistent supply risks,” said Mohith Velamala, a global oil analyst at BloombergNEF, adding that “this further complicates crude availability in Asia” which relies heavily on Saudi exports . The East-West Pipeline has been Saudi Arabia’s primary alternative route for crude exports to Europe and Asia, allowing the kingdom to bypass the Strait of Hormuz entirely, and its reduced capacity means more Saudi oil must now transit the contested waterway . The attacks come amid a broader pattern of Iranian and Iran-aligned strikes on Gulf energy infrastructure, with Kuwait also reporting that it was intercepting drone attacks targeting vital facilities .
The supply concerns have tempered the relief that followed Trump’s ceasefire announcement on Tuesday, which had sent oil prices plunging more than 10% as traders priced in the prospect of tanker traffic resuming through the Strait of Hormuz. “Concerns of further oil supply disruptions were heightened after the report,” ANZ analysts said in a Friday note, pointing to the sustained vulnerability of Gulf energy infrastructure even as diplomatic negotiations proceed . “All eyes remain firmly on tanker tracker flows through the Strait of Hormuz for any signs of increased activity ahead of peace talks scheduled in Pakistan on Friday,” Sycamore said, noting that actual shipping volumes remain far below normal levels despite the diplomatic breakthrough . For countries heavily reliant on Middle Eastern supplies, the uncertainty is already forcing action: Japan will release about 20 days of oil from its stockpiles in May, while the US has offered up to 30 million barrels from its Strategic Petroleum Reserve .
Trump has tried to pressure Iran directly, writing on Truth Social Thursday: “There are reports that Iran is charging fees to tankers going through the Hormuz Strait. They better not be and, if they are, they better stop now!” Iran’s new supreme leader, Mojtaba Khamenei, responded with a statement on Telegram that Iran “will definitely bring the management of the Strait of Hormuz to a new stage,” though it was unclear whether he was referring to past Iranian demands to retain control of the waterway that the US has rejected . As Vice President JD Vance prepares to lead the US delegation to Islamabad for talks with Iranian officials on Saturday, the Strait of Hormuz will remain the central issue . “The market is refocusing on the reality of flows through the Strait of Hormuz, which remain far from normalized and are unlikely to snap back quickly,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth Group . With Saudi production slashed and Iranian threats continuing, the oil market’s rollercoaster is far from over .
