Oil prices fell for a third straight session on Friday as two quiet workarounds took the edge off the Middle East supply crisis: Saudi Arabia is exporting crude through ship-to-ship transfers off Oman, and it has asked China to pressure Iran into restraining the Houthis.
Brent crude settled down about 1% near $103.77 a barrel, with US West Texas Intermediate near $100.88. Both benchmarks had approached $110 earlier in the week after drone attacks knocked out part of Saudi Arabia’s East-West pipeline, the kingdom’s main route for exporting oil that avoids the Strait of Hormuz. The market has now given back most of that spike over three sessions.
The Sohar workaround
Trade sources told Reuters that Saudi Aramco has sold about 60 million barrels of crude from Ras Tanura, its Persian Gulf port inside the strait, for loading via ship-to-ship transfer near Oman’s Sohar port this month and next. The crude still transits Hormuz, but only for the short hop to the transfer zone. From there, other tankers carry it to Asia.
The rebound in Aramco’s exports from inside the Gulf to between one million and 1.5 million barrels per day, similar to or slightly above August levels, has cooled prices because it offsets some of the volume lost at Yanbu, the Red Sea terminal fed by the damaged pipeline. Chinese and South Korean refiners are among the top buyers of the spot cargoes, with some volumes going to India and Japan.
Saudi Arabia is also seeking to return about half the pipeline’s capacity to service within days, according to Bloomberg. US Energy Secretary Chris Wright called the outage “brief and temporary,” to be measured in days rather than weeks. Satellite imagery published by Gulf News shows the ship-to-ship transfers keeping Gulf oil moving, with some producers using tankers that operate with tracking systems switched off to cross the waterway, a tactic Iran itself has used for years to export sanctioned crude.
The costs of the workaround are rising. The freight rate to charter a very large crude carrier for a two-million-barrel load from Fujairah to Asia in early October hit 800 Worldscale, a record. The Petroleum Association of Japan said Japanese refiners have secured enough crude through November, with president Shunichi Kito noting that some oil passes through Hormuz at Saudi Arabia’s risk before being transferred outside the Gulf.
Beijing gets a request
The second piece of the Friday selloff came from diplomacy. Three Iranian sources told Reuters that China, acting on a Saudi appeal, has privately asked Tehran to use its influence with the Houthis to limit attacks on Saudi oil infrastructure. The request followed the Houthis’ rapid advance along Yemen’s Red Sea coast and around the Bab el-Mandeb strait, which left Saudi exports and shipping more exposed than at any point since the war began.
Chinese officials made no explicit threats and did not indicate Beijing would pressure Tehran economically, the sources said. Tehran’s response was that regional stability depends on ending the US-Israeli war on Iran. The Chinese foreign ministry, asked for comment, said China does not wish to see tensions spill further into Yemen and the Red Sea and calls for resolving issues through dialogue. China mediated the restoration of Saudi-Iranian relations in 2023, which gives it a channel few other powers have.
| Marker | Friday level | Move |
|---|---|---|
| Brent crude | about $103.77/bbl | down 1% |
| WTI crude | about $100.88/bbl | down 1% |
| Hormuz ship crossings | single digits daily | near standstill |
| VLCC Fujairah-Asia freight | 800 Worldscale | record high |
Why the calm is fragile
The workarounds address symptoms, not the war. Hormuz ship crossings remain in single digits per day, according to tracking data cited by Reuters. The International Energy Agency’s September report cut its world oil demand forecast by a further 940,000 barrels per day to a decline of 2.5 million for 2026, and put total supply down 5.7 million barrels per day this year, with Gulf recovery deferred to 2027. Observed global inventories have fallen 507 million barrels since the war began, an average draw of 2.8 million barrels per day.
The fighting itself is spreading. Saudi and Houthi forces exchanged strikes across their border on Thursday, and the Houthis claimed to have shot down a Saudi F-15 over Marib province. Yemeni officials and weapons experts told the Wall Street Journal that missile debris found in Yemen resembled Chinese-made Dongfeng DF-15 ballistic missiles, suggesting Riyadh has used such weapons in the conflict for the first time. More than 100,000 Yemenis have been displaced by the latest fighting, according to the International Organization for Migration.
President Donald Trump, meanwhile, told Axios he is approaching “a big decision” on whether to restart large-scale attacks on Iran. JP Morgan’s commodities team said this week it no longer has a base case for when the conflict ends or where prices go, with strategist Natasha Kaneva writing, “We don’t know how to model the endgame.” The bank’s fair-value estimate for Brent remains $90, far below where the benchmark has actually traded.
Markets have chosen, for now, to price the workarounds rather than the worst case. But every leg of the relief trade depends on things the market does not control: Houthi restraint, pipeline repairs, tanker safety, and a diplomatic channel that runs through Beijing rather than Washington. A single struck tanker in the transfer zone off Sohar would undo three days of price relief in an afternoon.