Crude prices retreated Wednesday after Saudi Arabia established an alternative export channel through Oman’s Sohar port, reducing concern over prolonged disruptions following drone strikes on Red Sea infrastructure. Brent settled at $108.16 a barrel and West Texas Intermediate at $104.63, ending a two-day rally that had lifted both benchmarks more than 6% during the week. The earlier surge followed intelligence that Houthi drone operations had compromised Saudi Arabia’s east-west pipeline and forced the kingdom to halt operations at the Yanbu facility on the Red Sea coast. Saudi Arabia is facilitating deliveries to Asian refining customers through ship-to-ship transfers near Sohar. Strait of Hormuz traffic fell to four vessels Tuesday from a 10-day moving average of 18, although Macquarie said throughput may have remained above 7.5 million barrels a day since hostilities resumed August 30. Citi expects the waterway to return to normal operations in the fourth quarter of 2026 through diplomatic channels, while near-term geopolitical tensions are expected to keep crude prices elevated. U.S. stockpiles rose by 7.1 million barrels, exceeding analyst expectations for a 1.6 million-barrel decline. European gasoil futures reached record highs as Middle Eastern diesel and aviation-fuel imports fell and conflicts in Eastern Europe disrupted Russian refining capacity. U.S. diesel prices exceeded $6 a gallon nationally, and three Libyan production facilities were reportedly halted. The price surge also pushed the 10-year U.S. Treasury yield to a level not seen in about two decades, while markets priced a 92% probability of a Federal Reserve rate increase at Wednesday’s meeting. The U.S. Strategic Petroleum Reserve fell by about 130 million barrels during 2026 to 285.36 million barrels.