Brent Crude Slides as Hormuz Hopes Outweigh Russia Supply Risks
Oil prices have fallen on Friday and are heading for their first weekly decline in three weeks as hopes of improved shipping through the Strait of Hormuz outweighed fresh supply risks from Russia.
Brent crude fell about 0.3% to $89.45 a barrel, while US West Texas Intermediate slipped 0.3% to $83.31. Brent is down roughly 5.3% this week and WTI about 4.3%, reversing part of their recent rally.
The market is caught between two geopolitical forces: Middle East diplomacy is removing some risk premium, while Ukrainian attacks on Russian energy infrastructure are tightening the refined-fuel outlook.
Russia has imported more than 1 million barrels of gasoline by sea since late July to address domestic shortages. Moscow is also preparing to extend restrictions on diesel exports through September after Ukrainian attacks left several refineries idle and contributed to recurring regional fuel shortages.
A functioning Hormuz corridor would strengthen the bearish case, but a breakdown in diplomacy or deeper Russian refinery outages could quickly put $90 Brent back in play.