Crude Oil Prices Hold Steady at $75 as Tankers Navigate Hormuz Following Four Months of Turmoil
Crude oil prices dipped on Friday as fears of supply disruptions eased with increased tanker movement through the Strait of Hormuz. As of 7 am IST, Brent crude was priced at $74.95 a barrel, down 31 cents or 0.41%. Meanwhile, US West Texas Intermediate (WTI) crude fell by 32 cents, or 0.44%, to $71.60 a barrel.
Tensions in the region had previously driven prices up over 2% on Thursday after an unidentified projectile struck a cargo ship near Oman. Following this incident, the United Nations’ shipping agency halted its voluntary evacuation program. Two US officials reported that Iran fired at the vessel as it navigated the Strait of Hormuz, with Iranian authorities warning that the safety of ships outside designated routes could not be assured.
Despite the recent uptick in geopolitical risks, markets are closely monitoring whether tanker traffic will stabilize or if these developments will hinder planned production increases. IG analyst Tony Sycamore noted that the geopolitical risk premium is re-emerging in oil prices. Both Brent and WTI crude are projected to record weekly losses of approximately 7%.
Crude shipments through the Strait of Hormuz have surged this week to their highest levels since the onset of the US-Israeli conflict with Iran in February. This increase follows a ceasefire agreement that reopened the critical shipping route. However, traffic remains significantly below pre-conflict levels, with around 125 ships passing through daily before February 28.
In Venezuela, recent earthquakes raised concerns about oil supply stability. Initial assessments indicated limited damage to the country’s oil and gas infrastructure, as major production areas and refineries were largely unaffected. However, sources warned that power outages could hinder Venezuela’s ability to sustain oil production at nearly 1.2 million barrels per day, its pre-earthquake output. Since the conflict with Iran began, oil prices had surged, even exceeding $126 per barrel, but have since retreated to their lowest levels in four months, approaching pre-war prices.
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