Oil prices dive as more tankers move through Strait of Hormuz
- Brent crude futures settled at $71.99 a barrel, down $3.27, or 4.34%
Crude prices fell sharply, heading for steep weekly losses, as tankers continued exiting the Strait of Hormuz, easing supply concerns despite earlier vessel attacks.
- Significant weekly losses for Brent and WTI crude.
- Increased tanker traffic through the Strait of Hormuz.
- Saudi Aramco resuming oil loading at Ras Tanura.
- Iran's reassertion of control over the Strait.
HOUSTON: 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, or 4.34%. US West Texas Intermediate finished at $69.23 a barrel, down $2.69 or 3.74%.
Since the market closed last Thursday, the Brent benchmark fell 10.86%, while WTI fell 9.62% for the week. The market closed for a public holiday last Friday.
“There is a growing sense that oil is going to keep moving through the Strait of Hormuz,” said Phil Flynn, senior analyst with Price Futures Group.
READ MORE: Oil set for big weekly losses as tankers exit Strait of Hormuz
Prior to the agreement on 60-day ceasefire, markets worried supplies would fall short of demand, but those fears seem 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 very large crude carriers (VLCCs), which can load cargoes of 2 million barrels, took on crude at the terminal while another waited nearby, the data showed.
“There is a general selloff as the market reacts to the increased flows exiting the Strait of Hormuz and China not yet picking up crude demand,” said June Goh, senior oil market analyst at Sparta Commodities.
Unknown projectile hits vessel
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 is 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.
Meanwhile, Russian authorities are considering a diesel export ban for several months, state news agency TASS said on Friday.
Russia, a major diesel exporter, faces fuel supply issues after Ukrainian drone attacks extensively damaged its oil refineries and other energy infrastructure.