Oil prices extend losses as Saudi pipeline repairs ease supply concerns

Oil prices declined for the second day in a row on Thursday, with Brent crude trading near US$105 per barrel, following reports that Saudi Arabia intends to restore about half the capacity of its East-West pipeline damaged by drone attacks within days. The pipeline, an alternative route for Saudi crude to circumvent the Strait of Hormuz, was expected to return to full operation within six weeks.

Saudi Arabia has also intensified efforts to increase crude shipments through the Strait, with the assistance of the US military. According to US Energy Secretary Chris Wright, 18 million barrels of crude and petroleum products had passed through the Strait of Hormuz earlier in the week. In the United States, official data revealed a decline in crude inventories by 640,000 barrels to 423.4 million barrels, although this decrease was less than analysts had anticipated, contrary to the American Petroleum Institute's earlier estimate of a 7.1 million-barrel increase in crude stocks.

The US dollar strengthened, with the dollar index surpassing 100 for the first time in nearly seven weeks, driven by the Federal Reserve's 25 basis point interest rate hike, which was unanimously approved and considered expected. The Fed's projections suggested potential further rate hikes, while revisions showed lower unemployment forecasts and higher economic growth expectations.

The decision benefited the dollar, following earlier remarks by Fed Chairman Jerome Powell that raised doubts about the central bank's determination to curb inflation, leading to increased demand for safe-haven currencies like precious metals. The Bank of England is anticipated to maintain interest rates, while the Bank of Japan is set to raise them. The US dollar also rose by 0.76% against the Malaysian ringgit on September 17, 2026.