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Crude oil market continues climb, amid Strait of Hormuz uncertainties
Global crude oil market remained volatile, Friday, amid uncertainties by investors over the inability of United States and Iran to reach a peace agreement that would allow shipping traffic to return to normal in the Strait of Hormuz.
Brent crude futures settled at $103.54 a barrel, up 96 cents, or 0.94 per cent, while the US West Texas Intermediate (WTI) futures finished at $96.60 a barrel, up 25 cents or 0.26 per cent. For the week, Brent was 5.48 per cent lower, and WTI was down by 8.37 per cent.
Prices were volatile as expectations for a peace deal between Iran and the US shifted, with the story now that Iran will deliver the uranium for the lifting of sanctions.
It was also reported that Pakistan’s army chief had left for Iran after talks, while a senior Iranian source told Reuters earlier that gaps with the US have narrowed.
Meanwhile, the US Secretary of State Marco Rubio spoke of “some good signs” in talks. Mr Rubio said the US was in constant communication with the Pakistanis, who are facilitating the talks with Iran, adding that also said the US had not requested the assistance of NATO allies in reopening the strait after a meeting.
The countries remained divided on Iran’s uranium stockpile and controls on the Strait of Hormuz.
Separately, a Qatari negotiating team arrived in Tehran on Friday in coordination with the US to help secure a deal. This comes as six weeks into the fragile ceasefire in the US-Israeli war with Iran, elevated oil prices have investors worried about inflation and the outlook for the global economy.
Around 20 per cent of global energy supplies transited the strait before the war, which has removed 14 million barrels per day of oil – or 14% of global supply – from the market, including exports from Saudi Arabia, Iraq, the UAE and Kuwait.
Head of the United Arab Emirates (UAE) state oil firm ADNOC said that full oil flows through the strait will not return before the first or second quarter of 2027, even if the conflict ends now.
Seven sub-group members of oil-producing countries under the Organisation of the Petroleum Exporting Countries (OPEC) will likely agree to a modest hike to July output when they meet on June 7, though delivery for several remains disrupted by the war.
