Oil prices fell on Friday as hopes that China could help limit attacks by Iran-backed Houthi rebels on Saudi oil infrastructure eased some concerns about further supply disruptions in the Middle East. Brent crude futures settled at $103.87 a barrel, down $0.95, or 0.93%, while U.S. West Texas Intermediate crude futures settled at $100.30 a barrel, down $1.61, or 1.58%.

Oil prices have risen steadily in recent weeks as the U.S. and Iran resumed military attacks and the Iran-aligned Houthis increased their attacks on Saudi Arabia. The disruptions, combined with refinery problems around the world, have pushed diesel prices sharply higher. U.S. retail diesel prices have reached a record $6.45 per gallon, while gasoline is averaging $4.47 per gallon, according to AAA.

Refining capacity is also becoming a significant concern in the U.S. IIR Energy expects operating U.S. refining capacity to fall by approximately 371,000 barrels per day next week. “Right now it’s not a supply problem; it’s a refining problem,” said Phil Flynn, senior analyst at Price Futures Group.

The outlook for the oil market remains uncertain. JPMorgan said it does not have a clear baseline view for the oil market for the first time since the U.S.-Israeli war with Iran began in February.

The Strait of Hormuz also remains largely restricted. Only four commodity vessels passed through the strait on Thursday, well below the 10-day average of approximately 16. The waterway carried roughly one-fifth of global oil supplies before the war began.

Oil prices had climbed close to four-month highs earlier this week after crude loadings at Saudi Arabia’s Red Sea export hub of Yanbu were suspended and Saudi Arabia canceled some crude deliveries to Europe following damage to its East-West pipeline. Three pumping stations along the pipeline were damaged in last week’s attack, and the timeline for restoring normal operations remains uncertain.

Saudi Arabia is working to restore approximately half of the pipeline’s capacity within days, but the timing for a full return to normal crude flows remains unclear.

China’s reported request for Iran to limit Houthi attacks on Saudi oil infrastructure provided some relief to the market, but the situation remains fluid. The key question for the oil market is whether physical flows through the region can return to normal and how quickly that can happen.

• Where: The Westin Galleria Dallas
• Attending: David Cohen (954-729-4774), and Curtis Chandler (239-405-3365)
• Conference Website

• Where: The Westin Galleria Dallas
• Attending: Brian Baker (239.297.4519)
• Conference Website