- Aramco resumes oil filling after 4 months stoppage.
- Hormuz charges at highest level since war began.
- The total traffic is still a fraction of the daily average.
Crude oil prices fell 2% on Friday, heading for steep weekly losses on easing supply concerns as several stranded oil tankers left the Strait of Hormuz, although a cargo ship was hit near Oman on Thursday.
Brent crude futures fell $1.47, or 1.95%, to $73.79 a barrel, while US West Texas Intermediate fell $1.44, or 2%, to $70.48 a barrel.
Refining giant Saudi Aramco resumed oil filling on Friday at its Ras Tanura terminal in the Gulf after a nearly four-month shutdown, shipping data from LSEG showed. Two very large Crude Carriers were seen loading crude oil 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 the increased flows leaving the Strait of Hormuz and China not yet picking up crude 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 unidentified projectile near Oman, prompting the United Nations shipping agency to suspend its voluntary evacuation scheme.
This was reported by two American officials Reuters that Iran fired on the cargo ship as it tried to pass through the strait. Iranian authorities said the safety of ships passing outside the designated Hormuz routes is not guaranteed.
Brent and WTI crude are both on track for losses of around 8% this week.
Crude shipments through the Strait of Hormuz rose this week to their highest level since the US-Israel conflict with Iran began in February, data showed on Thursday after a ceasefire deal reopened the waterway, while concerns about how long the strait would remain open also boosted trade.
However, the total traffic is still a fraction of the daily average of 125 ships passing through the strait before the February 28 conflict began.
“Much of the increase reflects previously stranded vessels leaving the Persian Gulf. Vessel flows into the Gulf remain much more modest. This suggests that once stranded vessels have moved out, we could see a decline in flows,” ING analysts wrote in a note.
Meanwhile, Thursday’s earthquake in Venezuela also raised supply concerns.
Preliminary assessments by workers of Venezuela’s vast oil, gas and refining infrastructure showed limited damage so far, as most of the country’s biggest production regions, refineries, pipelines and terminals are far from the worst-hit areas.
Still, power shortages have cast doubt on whether oil production can be maintained at pre-quake levels of close to 1.2 million barrels per day, sources said.
