Oil prices fall over 3% as tankers move through Strait of Hormuz

HOUSTON: Oil prices fell by more than 3 percent on Friday as more tankers moved through the Strait of Hormuz, easing supply concerns a day after a cargo vessel was hit near Oman.

Brent crude futures settled at $71.99 a barrel, down $3.27, or 4.34 percent. US West Texas Intermediate closed at $69.23 a barrel, lower by $2.69, or 3.74 per cent.

For the week, Brent dropped 10.86 percent and WTI fell 9.62 percent. The market was closed last Friday for a public holiday.

The decline came as crude shipments through the Strait of Hormuz rose this week to their highest level since the US-Israeli conflict with Iran began at the end of February.

Saudi Aramco also resumed crude loading at its Ras Tanura terminal in the Gulf on Friday after a nearly four-month suspension, according to LSEG shipping data.

Two very large crude carriers, each capable of loading around 2 million barrels, were taking crude at Ras Tanura, while another was waiting nearby.

The increase in flows has reduced fears of a supply shortage following the 60-day ceasefire agreement that reopened the waterway. However, overall traffic through the strait remains well below the pre-war daily average.

Oil prices had risen more than 2 percent on Thursday after a cargo vessel was struck by an unknown projectile near Oman, prompting the United Nations shipping agency to suspend its voluntary evacuation scheme.

Two US officials told Reuters that Iran fired on the vessel as it attempted to pass through the strait. Iranian authorities said safe passage would not be guaranteed for ships travelling outside designated Hormuz routes.

On Friday, Iran again asserted its right to control shipping through the Strait of Hormuz and warned Gulf states against siding with the United States.

Analysts said the market was now reacting more to rising supply than to security risks, with increased flows through Hormuz and weak Chinese crude demand adding pressure on prices.

Separately, Russian authorities are considering a diesel export ban for several months, according to state news agency TASS.

Russia, a major diesel exporter, has faced fuel supply problems after Ukrainian drone attacks damaged oil refineries and other energy infrastructure.