Brent crude retreats, but a 14% weekly jump says the danger is not fading

Brent crude slipped below $100 a barrel on Friday as traders took profits after Thursday’s surge, but the retreat offered little evidence that the threat to global oil supply was easing.

Brent futures fell 0.7% to $99.97 in early Asian trading, while US West Texas Intermediate eased to $91.49. Brent was still heading for a 13.5% weekly gain, with WTI up 10.9%, after Brent settled at $100.69 on Thursday, its first close above $100 since May.

The scale of the weekly advance reflects a market confronting overlapping disruptions rather than a temporary geopolitical rally.

Brent slips, but the rally leaves a warning

Friday’s decline looked modest beside the previous session’s jump.

Brent rose 7% on Thursday after Houthi forces said they had attacked two tankers carrying Saudi crude in the Red Sea, intensifying concerns over the Bab el-Mandeb Strait.

The rally also marked another weekly advance, suggesting traders are assigning greater probability to physical supply losses, longer voyages and rising freight and insurance costs.

That repricing shows traders fear disruption will persist beyond these latest headlines.

“The noose around global energy supply routes is pulling tighter again,” IG market analyst Tony Sycamore said in a note.

Traffic through the Strait of Hormuz was already heavily restricted after renewed US-Iran fighting.

The latest attacks pressure the main alternative corridor for bypassing that disruption, turning one chokepoint problem into two.

Houthi attacks threaten Saudi Arabia’s escape route

Saudi Arabia has moved crude through its East-West pipeline to the Red Sea to reduce reliance on Hormuz.

Tankers must then pass Bab el-Mandeb to reach many Asian buyers or take longer routes towards Europe.

Baringa energy analyst Ellen Fraser called it a “double hit”, The Wall Street Journal reported.

She said it could reduce Middle Eastern exports while forcing Europe-bound cargoes around southern Africa, lengthening journeys and raising costs. Prices could rise further unless tensions ease, she added.

The risk extends beyond damaged barrels. Shipping companies may reroute vessels, pause sailings or demand higher insurance premiums, tightening prompt availability before producers reduce output.

Two Chinese supertankers carrying four million barrels of Saudi crude exited through Bab el-Mandeb on Thursday, showing the route remained open.

However, isolated successful crossings do not remove the risk of a broader retreat by shipowners.

Kazakhstan adds another supply shock

The Middle East is not the market’s only problem.

Kazakhstan reduced production after suspected Ukrainian drone attacks forced the Caspian Pipeline Consortium to halt loadings at its Black Sea terminal, a route handling about 2% of global daily crude supply.

Kazakhstan’s oil and condensate output fell to roughly 1.63 million barrels per day from a July average of 2.07 million.

Production at the Chevron-led Tengiz field more than halved to about 406,000 barrels per day.

Mizuho energy-futures director Bob Yawger told Reuters that pressure across two major chokepoints had brought crude within reach of the four-year high of $126.41 as available supplies shrink.

Goldman Sachs retained an $80 fourth-quarter base case but said Brent could exceed $120 if Hormuz disruption persists and risks spread across Bab el-Mandeb and the Suez route.