Oil Falls Sharply Despite Ship Attack in Hormuz
Oil prices fell sharply again on Friday (June 26th) after more tankers exited the Strait of Hormuz. This move eased supply concerns, despite a reported attack on a ship in the Gulf of Oman.
Brent crude for August delivery fell 4% to US$72.02 per barrel. Meanwhile, West Texas Intermediate (WTI) crude for August delivery fell 3.6% to US$69.34 per barrel.
The price decline occurred as investors continued to monitor developments in the Middle East. The market believes that the continued flow of ships through the Strait of Hormuz could reduce the risk of disruption to the global energy supply chain, especially following diplomatic efforts between the United States and Iran.
However, geopolitical risks have not completely subsided. A United States official said Iran was behind an attack on a cargo ship near the coast of Oman in the Strait of Hormuz. The ship was sailing under a Singaporean flag. United Kingdom Maritime Trade Operations stated that there were no casualties or environmental damage from the incident.
United States President Donald Trump later claimed Iran had violated the ceasefire through a drone attack in the Strait of Hormuz. Trump stated that the ship was still able to continue its journey, while three other drones were shot down.
The International Maritime Organization (IMO) also decided to temporarily halt the planned evacuation of the ship. IMO Secretary-General Arsenio Dominguez said the measure was taken to reassure the safety of the ships on the evacuation list and other vessels in the region.
Despite the new attack, the oil market is more focused on improving shipping flows. If tankers can continue to pass through the Strait of Hormuz, the risk of energy supplies from the Middle East is considered more manageable. This situation reduces the geopolitical risk premium that had previously boosted oil prices.
On the diplomatic front, tensions between the United States and Iran continue. The two countries differ on the use of Iranian funds frozen in a memorandum of understanding. The speaker of Iran's parliament rejected the Trump administration's claim that the unfrozen assets would be used to purchase American agricultural products.
United States officials continue to maintain that the released funds will be subject to Washington's approval and used to purchase American agricultural products to help feed the Iranian people. These differing interpretations indicate that the interim agreement between the two countries remains fragile.
Analysts believe the market may be overly optimistic about regional stability. Scott Nations of Nations Indexes said many questions remain regarding the true content of the agreement. He believes Iran still has significant influence on the global economy if it chooses to close or disrupt the Strait of Hormuz.
Beyond geopolitical factors, market attention is also focused on OPEC dynamics. The oil cartel faces the risk of another major producer leaving after the United Arab Emirates left the group in May. Iraq has reportedly demanded a higher production quota and may consider leaving if its demands are not met.
Overall, the weakening oil price indicates that the market currently places more confidence in the recovery of supply flows than the risk of short-term conflict. However, as long as the Strait of Hormuz remains a vulnerable point and US-Iran relations remain unstable, oil prices remain at risk of volatile movements in the coming sessions.
Source: Newsmaker.id
