Crude Oil Prices Slide As Strait Of Hormuz Supply Fears Ease

Global crude oil prices fell sharply on Friday and were on track to record steep weekly losses as easing concerns over supply disruptions in the Strait of Hormuz outweighed fresh geopolitical tensions following an attack on a cargo vessel near Oman.

International benchmark Brent crude futures dropped $1.51, or 2 per cent, to $73.75 a barrel in early trade, while US West Texas Intermediate (WTI) crude fell $1.50, or about 2 per cent, to $70.42 a barrel.

Both benchmark contracts had risen more than 2 per cent in the previous session after a cargo vessel was struck by an unidentified projectile near Oman, prompting the United Nations shipping agency to suspend its voluntary evacuation programme.

According to media reports, two US officials said Iran had fired on the vessel as it attempted to pass through the Strait of Hormuz.

Iranian authorities, however, said they could not guarantee the safety of ships sailing outside designated Hormuz routes.

Despite the latest security concerns, both Brent and WTI were heading for weekly losses of nearly 7 per cent as fears of supply disruptions eased after tanker traffic through the Strait of Hormuz improved.

Crude shipments through the strategic waterway rose this week to their highest level since the US-Israel conflict with Iran began in February, helped by a ceasefire that reopened the route.

Vessel traffic remained below the pre-conflict average of 125 ships a day.

India’s crude basket averaged $86.31 per barrel in June, down from $106.23 in May and $114.48 in April.

Global benchmark Brent crude, which had touched about $120 per barrel at the height of the conflict, is now trading near $74 per barrel.

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