Crude prices dropped by 2% on Friday and were set for significant weekly losses due to easing supply concerns as more stranded oil tankers exited the Strait of Hormuz. Despite a cargo vessel being hit near Oman on Thursday, Brent crude futures fell $1.47 or 1.95%, reaching $73.79 a barrel, while US West Texas Intermediate fell $1.44 or 2%, hitting $70.48 a barrel.
Saudi Aramco resumed oil loading at its Ras Tanura terminal in the Gulf after a four-month pause, according to shipping data from LSEG. Two Very Large Crude Carriers were seen unloading crude at the terminal, while another waited nearby. Each VLCC can load 2 million barrels of oil.
Market analysts attribute the general sell-off to increased flows exiting the Strait of Hormuz and China not yet recovering its crude demand. Both benchmark contracts jumped more than 2% on Thursday after a cargo vessel was hit by an unknown projectile near Oman, leading the UN’s shipping agency to suspend its voluntary evacuation scheme.
Two US officials told Reuters that Iran fired on the cargo ship as it attempted to pass through the strait. Iranian authorities said the security of vessels passing outside designated Hormuz routes is not guaranteed.
Crude shipments through the Strait of Hormuz rose this week to their highest level since the US-Israeli conflict with Iran began in February, according to data. However, overall traffic remains a fraction of the daily average of 125 ships before the conflict began on February 28.
Earthquakes in Venezuela also raised supply concerns. Preliminary assessments by workers showed limited damage to the country’s vast oil, gas, and refining infrastructure. Still, a lack of power has cast doubt on whether oil output can be sustained at its pre-earthquake level of close to 1.2 million barrels per day.