Hormuz Tensions Weigh on Oil Prices Ahead of Weekly Losses
Oil prices have remained relatively steady on Friday but are set to end the week lower due to stalled US-Iran diplomatic talks and uneven recovery in crude flows through the Strait of Hormuz. The Brent crude futures price is down 4 cents at $89.66 a barrel, while US West Texas Intermediate (WTI) crude fell 32 cents, or 0.38%, to $83.21 a barrel.
A combination of US tactics moving to economic sanctions rather than military pressure and talks of Oman-Iran's joint corridor have led to risk premiums declining, according to Suvro Sarkar, head of energy research at DBS Bank. The Strait of Hormuz, through which around 20% of the world's oil supply moves, has seen a tentative recovery in shipping, although flows remain uneven.
Preliminary shipping data showed that seven commodity vessels transited the waterway on Thursday, down from 17 a day earlier and below the 10-day average of 15. Goldman Sachs estimated that total Gulf exports recently stood at 15 million to 16 million barrels per day, around 7 million to 8 million bpd below pre-war levels but 5 million to 6 million bpd above the lowest point recorded in March.