- Global crude prices fell sharply, easing supply disruption fears.
- Decline occurred despite a cargo vessel attack near Oman.
- Strait of Hormuz tanker traffic improved, reducing market concerns.
Global crude oil prices declined sharply on Friday and were on course to register significant weekly losses as concerns over supply disruptions through the Strait of Hormuz continued to ease, outweighing renewed geopolitical tensions after a cargo vessel was attacked near Oman.
International benchmark Brent crude futures fell by $1.51, or 2 per cent, to $73.75 a barrel during early trade. US West Texas Intermediate (WTI) crude also slipped by $1.50, or around 2 per cent, to $70.42 a barrel, reported IANS.
The decline came despite both benchmark contracts gaining more than 2 per cent in the previous trading 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.
Strait of Hormuz remains in focus
According to media reports, two US officials said Iran had fired at the cargo vessel as it attempted to pass through the Strait of Hormuz. Iranian authorities, however, maintained that they could not guarantee the safety of vessels travelling outside the designated routes in the strait.
Even with the latest security incident, both Brent and WTI were heading for weekly declines of nearly 7 per cent as market concerns over supply disruptions continued to recede.
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Improved tanker movement through the Strait of Hormuz has helped ease fears surrounding crude supplies. Shipments through the strategic waterway reached their highest level this week since the US-Israel conflict with Iran began in February, following a ceasefire that enabled the route to reopen.
However, overall vessel traffic remained below the pre-conflict average of around 125 ships a day.
Indian crude basket moderates
The Indian basket of crude oil, which is a weighted average of Brent Dated, Oman and Dubai crude grades imported by domestic refiners, averaged $86.31 per barrel so far in June after rising during the West Asia conflict.
The basket had averaged $106.23 per barrel in May and $114.48 per barrel in April.
Global benchmark Brent crude, which had climbed to around $120 per barrel at the peak of the conflict, is now trading near $74 per barrel.
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