Oil retreated for a third straight session on Friday as traders absorbed mixed signals about supply disruptions in the Middle East. As of 22:31 ET (02:31 GMT), Brent futures for November delivery were down 0.7% at $104.12 per barrel, while West Texas Intermediate crude slipped 0.5% to $101.40 per barrel.
The pullback in prices came despite renewed hostilities between Saudi Arabia and Yemen's Iran-backed Houthi forces, a development that has added another layer of risk to regional energy shipments already affected by fighting through the Strait of Hormuz. Markets, however, appeared to focus on indications that Saudi Arabia might be able to restore some of the shipments disrupted by recent drone attacks.
Media reports said that the East-West pipeline, which normally moves Saudi crude to Yanbu on the Red Sea coast and was damaged in last week's drone strikes, could see roughly half of its capacity returned within days. The prospect of a partial restart of that key inland route appears to have tempered immediate fears of a larger and more sustained loss of Saudi volumes.
In addition to repair efforts, Riyadh has been offering extra cargoes to Asian refiners using ship-to-ship transfers off Sohar port in Oman. These transfers provide an alternate export pathway around the damaged pipeline and have been cited in reports as another factor loosening some concern over lost supply.
Despite those mitigating steps, uncertainty around supply persisted. Iran's Revolutionary Guards Navy said on Friday that a Togo-flagged tanker had been struck while it was attempting what Iranian state media described as an "illegal passage" through the Strait of Hormuz. The media account underlined the volatile operating environment for vessels in the waterway.
Diplomacy has become another central element for markets. President Donald Trump told Axios that he was approaching a major decision on whether to resume large-scale military action against Iran. He is scheduled to meet leaders from Saudi Arabia, the United Arab Emirates, Qatar, Bahrain, Kuwait and Oman next week on the sidelines of the United Nations General Assembly in New York, according to Axios.
China has also stepped up engagement. Chinese Foreign Minister Wang Yi urged both Washington and Tehran to show restraint and to reopen the Strait of Hormuz, while Iranian Foreign Minister Abbas Araghchi held consultations with Chinese and Pakistani officials. Those diplomatic exchanges are being watched for any signs they might reduce risks to oil flows.
Overall, the conflict has pushed both Brent and WTI prices above $100 per barrel. The latest trading session shows market participants balancing the immediate supply risks from ongoing hostilities and maritime incidents against signs of repaired infrastructure and alternative shipping options.