- Aramco resumes oil loadings after a 4-month shutdown.
- Hormuz shipments are at their highest level since the start of the war.
- Overall traffic remains a fraction of the daily average.
Crude prices fell 2% on Friday and were heading for sharp weekly losses amid easing supply problems as more stranded tankers left the Strait of Hormuz, although a cargo ship was hit near Oman on Thursday.
Brent crude futures fell $1.47, or 1.95%, to $73.79 a barrel, while U.S. West Texas Intermediate fell $1.44, or 2%, to $70.48 a barrel.
Refining giant Saudi Aramco resumed loading oil at its Ras Tanura terminal in the Gulf on Friday after a nearly four-month hiatus, according to LSEG shipping data. Two very large crude carriers were seen loading crude at the terminal, while another waited nearby, the data showed. Each VLCC is capable of loading 2 million barrels of oil.
“There is a general sell-off as the market reacts to increased flows out of the Strait of Hormuz and China not yet meeting crude demand,” said June Goh, senior oil market analyst at Sparta Commodities.
Both benchmark contracts jumped more than 2% on Thursday after a cargo ship was hit by an unknown projectile near Oman, prompting the UN maritime agency to suspend its voluntary evacuation program.
Two US officials said Reuters that Iran fired on the cargo ship as it attempted to cross the strait. Iranian authorities have said the safety of ships passing outside Hormuz’s designated routes is not guaranteed.
Brent oil and WTI crude are both heading for losses of around 8% this week.
Data showed on Thursday that crude shipments through the Strait of Hormuz this week reached their highest level since the start of the US-Israeli conflict with Iran in February after a ceasefire deal reopened the waterway, while concerns over how long the strait would remain open also boosted trade.
However, overall traffic is only a fraction of the daily average of 125 ships passing through the strait before the conflict began on February 28.
“Much of the increase reflects the departure of stranded ships leaving the Persian Gulf. Ship flows entering the Gulf remain much more modest. This suggests that once stranded ships leave the Persian Gulf, we may see a decline in flows,” ING analysts wrote in a note.
Meanwhile, Thursday’s earthquakes in Venezuela also raised supply concerns.
Preliminary assessments by workers of Venezuela’s vast oil, gas and refining infrastructure have shown limited damage so far, as most of the country’s largest production regions, refineries, pipelines and terminals are far from the hardest-hit areas.
However, the lack of electricity raises doubts whether oil production can be maintained at its pre-quake level of close to 1.2 million barrels per day, sources said.
