Crude prices fell by more than 3% on Friday, on course for steep weekly losses, as oil tankers kept exiting the Strait of Hormuz, easing supply concerns the day after a cargo vessel was hit near Oman.
Brent crude futures settled at $71.99 a barrel, down $3.27.
Since the market closed last Thursday, the Brent benchmark fell 10.86%.
“There is a growing sense that oil is going to keep moving through the Strait of Hormuz,” Phil Flynn, senior analyst with Price Futures Group, said.
Before the agreement on 60-day ceasefire, markets worried supplies would fall short of demand but the fears appear to be passing.
“The predominant view, it appears, remains one of imminent oversupply,” said PVM analyst Tamas Varga.
“We’re going to get a flood of oil,” Flynn said. “I think we’re going to see a huge flood of products.”
Oil giant Saudi Aramco resumed oil loading on Friday at its Ras Tanura terminal in the Gulf after a nearly four-month halt, shipping data from LSEG showed.
Two large crude carriers, which can load cargoes of two million barrels, took on crude at the terminal while another waited nearby, the data showed.
“There is a general sell-off as the market reacts to the increased flows exiting the Strait of Hormuz and China not yet picking up crude demand,” June Goh, a senior oil market analyst at Sparta Commodities, said
On Thursday, both benchmark contracts jumped more than 2% after a cargo vessel was hit by an unknown projectile near Oman, prompting the UN’s shipping agency to suspend its voluntary evacuation scheme.
Two US officials told Reuters that Iran fired on the cargo ship as it attempted to pass through the strait.
Iranian authorities said the security of vessels passing outside designated Hormuz routes was not guaranteed.
On Friday, Iran reasserted its right to control shipping through the Strait of Hormuz and warned Gulf states against siding with the US.
Data on Thursday showed that crude shipments through the strait rose this week to their highest since the US-Israeli conflict with Iran began at the end of February.
Despite the ceasefire deal that reopened the waterway, overall traffic is far below the pre-war daily average.
- Crude oil prices dropped over 3% on Friday, with Brent crude falling 10.86% since last Thursday, amid easing supply concerns after increased tanker movements out of the Strait of Hormuz.
- Market sentiment shifted from supply fears to expectations of imminent oil oversupply, fueled by the 60-day ceasefire agreement and resumed oil flows.
- Saudi Aramco restarted oil loading at its Ras Tanura terminal after nearly four months, with large crude carriers loading millions of barrels, signaling resumption of Gulf production.
- Earlier tension arose when a cargo vessel near Oman was hit by an unknown projectile, allegedly fired by Iran, leading to a temporary spike in oil prices and suspension of UN evacuation efforts.
- Despite the ceasefire reopening the Strait of Hormuz, traffic remains below pre-conflict levels, with Iran reaffirming control over the waterway and warning Gulf states against US alignment.
