The price of U.S. oil fell below $100 a barrel after Saudi Arabia reportedly made additional crude available through the Strait of Hormuz. Hormuz is the narrow waterway connecting the Persian Gulf to the open ocean, the main maritime exit for oil from the Gulf region. The offer came after an attack on a pipeline raised concerns about disruptions to Saudi Arabia's crude exports.
Here is what that means in plain terms. A pipeline attack creates a specific worry: if the pipe carrying crude from production fields to loading terminals is damaged, less oil reaches tankers, and tight supply pushes prices up. That was the concern after this attack. Saudi Arabia reportedly moved to address it by offering more crude through Hormuz, providing an alternative path to market. Additional Saudi supplies were enough to ease the concern.
Saudi Arabia's reported offer of additional crude through Hormuz was what pulled U.S. oil back below the $100 mark.