Oil Rises in Choppy Trade as Saudi Supply Losses Add to Hormuz Disruption
Oil climbed in volatile trading as markets priced in additional Middle East supply losses and continued severe constraints on shipping through the Strait of Hormuz.
West Texas Intermediate (WTI) for May delivery ended the session near $98 a barrel after earlier climbing to almost $103, while Brent for June traded around $97 a barrel.
Saudi Arabia said attacks on its facilities have taken more than 600,000 barrels a day of production capacity offline, according to the state press agency. Both benchmarks also swung earlier in the session on conflicting headlines about negotiations between Israel and Lebanon.
Iran called Israel’s strikes on Lebanon a “clear violation” of the fragile ceasefire agreed this week. With liquidity thinning, crude prices have become increasingly sensitive to fast-moving geopolitical headlines.
Investors remain on edge because flows through Hormuz are still heavily curtailed. The head of the UAE’s largest oil company said Iran is restricting passage, while Iran’s deputy foreign minister told a UK outlet that ships need Tehran’s consent to transit. The near-closure of the waterway — which carried about a fifth of global oil and liquefied natural gas flows before the U.S. and Israel first struck Iran in late February — has triggered what has been described as the largest oil-market supply disruption on record.
On Thursday, two fully laden Chinese oil tankers in the Persian Gulf were reported to be approaching the strait, potentially putting them on track to become the first such vessels to cross since the ceasefire was announced. A successful transit is not guaranteed, and traffic has shown little improvement over the past day.
“While paper markets tend to price a full reopening, the physical reality is that any recovery in flows will be gradual — and hasn’t meaningfully begun,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth Group. Iran’s Foreign Minister Abbas Araghchi said safe passage is possible under guidelines, and Iran’s Ports and Maritime Organization announced two designated safe routes for vessels entering and exiting the strait, according to state-run Nour News, aimed at avoiding possible mines.
President Donald Trump said in a social media post that U.S. military personnel and weaponry would remain positioned around Iran “until such time as the REAL AGREEMENT reached is fully complied with,” warning that if Iran does not comply, “the ‘Shootin’ Starts,’ bigger, and better, and stronger than anyone has ever seen before.”
Even if Hormuz transit begins to improve, a return of regional energy supply is not expected to be immediate. Output has been reduced at oil and gas fields, while refineries have curtailed runs or shut down — with some facilities likely needing weeks, if not longer, to normalize. Traders continued to pay elevated premiums for North Sea crude grades, signaling physical tightness persists.
WTI for May delivery rose 3.7% to settle at $97.87 a barrel. Brent for June climbed 1.9% to $96.56 a barrel as of 2:41 p.m. ET.
Source : Newsmaker.id
