Hormuz Traffic Collapse Drives Oil Prices Higher Amid Tightening Supply
The oil market has seen a second consecutive weekly gain, with Brent up over 4% and WTI up more than 5%, despite the absence of fresh headlines related to the ongoing conflict in the region. The Strait of Hormuz is currently functioning at a reduced capacity, with only seven ships passing through, which is contributing to tightened supply.
The scarcity of Iranian crude oil in Asia is also having an impact, as floating storage facilities in Iran are draining rapidly. Chinese refiners are struggling to find replacement barrels, which could further exacerbate the situation.
On Monday, the US Treasury will implement what it has described as 'the toughest sanctions in history' against Tehran, which could potentially disrupt global oil supplies even further.