This week, oil prices have experienced a decrease of more than 1%, driven by substantial price cuts from leading exporter Saudi Arabia and an uptick in OPEC output. This downturn offset concerns about escalating geopolitical tensions in the Middle East.
Brent crude slipped 1.09%, or 86 cents, settling at $77.90 a barrel by 0344 GMT. Simultaneously, U.S. West Texas Intermediate crude futures saw a decline of 1.15%, or 85 cents, reaching $72.96 a barrel.
The move by Saudi Arabia to lower the February official selling price (OSP) of its primary Arab Light crude to Asia to the lowest level in 27 months was influenced by increased supply and competition with rival producers.
Despite a promising start to 2024, with both contracts gaining more than 2% in the initial week as investors returned from holidays, the focus on geopolitical risk in the Middle East following attacks by Yemeni Houthis on ships in the Red Sea has been overshadowed by the recent developments in oil prices.