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Global crude oil futures dropped roughly 3% on Wednesday, pulling back from multi-month highs as Saudi Arabia offered alternative export routes via Oman and a smaller-than-expected draw in US crude stockpiles eased immediate supply concerns.

International benchmark Brent crude fell $2.92, or 2.7%, to settle at $105.83 a barrel. US West Texas Intermediate (WTI) crude declined $3.40, or 3.2%, to close at $102.43 a barrel.

The pullback reversed Tuesday’s three-dollar rally, which had surged on suspended loadings at Saudi Arabia's Red Sea hub of Yanbu and European cargo cancellations following pipeline strikes.

Downward pressure accelerated after Riyadh offered crude cargoes to Asian refiners via ship-to-ship transfers off Oman’s Sohar port, circumventing damaged Red Sea pipeline infrastructure. Losses widened after the US Energy Information Administration reported commercial crude stocks fell by only 640,000 barrels last week—missing forecasts of a 1.62-million-barrel draw—alongside surprise builds in gasoline and diesel inventories.

However, a deeper decline was checked by persistent regional instability as Houthi forces claimed fresh strikes on Yanbu amid ongoing Saudi airstrikes in Yemen. Strait of Hormuz transits remained heavily restricted, with daily commodity passages dropping to four vessels on Tuesday, well below the 10-day baseline of 18.

Meanwhile, acute tightness across refined products limited broader downside. European gasoil and US diesel futures hovered near record peaks, supported by Moscow extending its diesel export ban through October, maintaining elevated refining margins and ongoing feedstock cost-push pressure on petrochemical crackers.

Written by: Aiman Haikal