- Aramco resumes oil loading after a four-month stoppage.
- Hormuz shipments at the highest level since the war began.
- Overall traffic remains a fraction of the daily average.
Crude oil prices sank 2% on Friday and were headed for steep weekly losses amid easing supply concerns as more stranded oil tankers left the Strait of Hormuz, despite a cargo ship being hit near Oman on Thursday.
Brent crude oil futures fell $1.47, or 1.95%, to $73.79 a barrel, while U.S. West Texas Intermediate fell $1.44, or 2%, to $70.48 a barrel.
Refining giant Saudi Aramco resumed oil loading on Friday at its Ras Tanura terminal in the Gulf after a nearly four-month interruption, LSEG shipping data showed. Two very large crude oil vessels were seen loading crude at the terminal, while another waited nearby, the data showed. Each VLCC is capable of loading 2 million barrels of oil.
“There is a general sell-off as the market reacts to increased flows out of the Strait of Hormuz as China is yet to recover crude oil demand,” said June Goh, senior oil market analyst at Sparta Commodities.
Both benchmark contracts rose more than 2% on Thursday after a cargo ship was hit by an unknown projectile near Oman, prompting the UN shipping agency to suspend its voluntary evacuation plan.
Two US officials said Reuters that Iran fired on the cargo ship when it tried to pass through the strait. Iranian authorities said the safety of ships passing outside Hormuz’s designated routes is not guaranteed.
Both Brent oil and WTI crude are headed for losses of around 8% this week.
Data showed on Thursday that crude oil shipments through the Strait of Hormuz rose this week to their highest level since the US-Israel conflict with Iran began in February after a ceasefire deal reopened the waterway, while concerns about how long the strait would remain open also boosted trade.
However, overall traffic remains a fraction of the daily average of 125 ships that passed through the strait before the conflict began on February 28.
“Much of the increase reflects previously stranded vessels leaving the Persian Gulf. Vessel flows into the Gulf remain much more modest. It suggests that once stranded vessels have left, we could see a pullback in flows,” ING analysts wrote in a note.
Meanwhile, the earthquakes in Venezuela that occurred on Thursday also raised concerns about supply.
Preliminary assessments by workers of Venezuela’s vast oil, gas and refining infrastructure have so far shown limited damage, as most of the country’s biggest producing regions, refineries, pipelines and terminals are far from the worst-affected areas.
Still, the power shortage has called into question whether oil production can remain at its pre-quake level of about 1.2 million barrels a day, the sources said.
