Oil eases on signs US is loosening Iran’s Strait of Hormuz blockade Iran launched attacks in the Gulf on May 4 to counter the US move - About 20% of global oil and liquefied natural gas supplies passed through the strait before the US and Israel launched strikes against Iran on Feb 28. PHOTO: BLOOMBERG OIL prices eased on Tuesday (May 5) after climbing by as much as 6 per cent in the previous session on signs the US Navy is loosening Iran’s closure of the key Strait of Hormuz waterway, potentially opening up supply from the key Middle East producing area. The US on Monday launched a new operation aimed at reopening Hormuz to shipping and Maersk said later its Alliance Fairfax, a US-flagged vehicle carrier, exited the Gulf via the strait accompanied by US military assets, easing some immediate supply disruption fears. Brent oil futures for July fell US$0.68, or 0.6 per cent, to US$113.76 per barrel at 0100 GMT, after settling up 5.8 per cent on Monday. US West Texas Intermediate (WTI) crude fell US$1.59, or 1.5 per cent, to US$104.83, after gaining 4.4 per cent in the previous session. “The successful escorted exit of the Maersk-operated vessel has helped ease some immediate supply disruption fears,” said Tim Waterer, chief market analyst at KCM Trade. “It shows that limited safe passage is possible under current conditions and helps chip away at some of the worst-case supply disruption fears. However, it’s still very much a one-off event rather than a full reopening,” he said in an e-mail. Still, Iran launched attacks in the Gulf on Monday to counter the US move as they wrestle for control over the Strait of Hormuz, which connects the Gulf to wider markets and typically carries oil and gas supply equal to about 20 per cent of global demand every day. Several commercial vessels were reportedly struck in the area, while a key oil port in the United Arab Emirates was set ablaze after an Iranian strike. Navigate Asia in a new global order Get the insights delivered to your inbox. Trump’s attempt to use the US Navy to free up shipping is the war’s biggest escalation since a ceasefire was declared four weeks ago. The US is pushing to open Hormuz to ease a massive disruption to global energy supplies since Iran mostly shut the strait after the US and Israel started the war on Feb 28. On Monday, Chevron chairman and CEO Mike Wirth said physical shortages in oil supply would begin appearing around the world because of the Hormuz closure. Because of the disruptions, global oil stocks are approaching their lowest level in eight years, Goldman Sachs said on Monday, warning that the speed of depletion was becoming a concern as supplies remained restricted. “With the world rapidly burning through commercial stockpiles, strategic reserves, and crude held in floating storage, the underlying supply squeeze remains a potent tailwind for oil prices,” IG market analyst Tony Sycamore said in a note. REUTERS Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free. Share with us your feedback on BT's products and services TRENDING NOW On the board but frozen out: The Taib family feud tearing Sarawak construction giant apart OCBC to acquire HSBC Indonesia’s wealth, retail business, adding S$6.6 billion in AUM Thai and Vietnamese farmers may stop planting rice because of the Iran war. Here’s why The Singapore equities market is buzzing. Market players are hoping it can last
Oil eases on signs US is loosening Iran’s Strait of Hormuz blockade Iran launched attacks in the Gulf on May 4 to counter the US move - About 20% of global oil and liquefied natural gas supplies passed through the strait before the US and Israel launched strikes against Iran on F…
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A tanker identified as the Kaifan was struck by an unknown projectile northeast of Oman’s Limah in the Strait of Hormuz, according to a July 21 report from UK Maritime Trade Operations. No ships were observed transiting the strait that day. Attribution of the strike and links to prior incidents have not been confirmed by the vessel’s owner.
Goldman Sachs has projected Brent crude averaging $80 per barrel in the fourth quarter and $75 in the following year, conditional on reduced Middle East tensions, while noting upside risks from potential shipping disruptions in the Strait of Hormuz or Red Sea.
Brent prices rose above $91 per barrel amid recent U.S.-Iran exchanges and Houthi threats to Saudi shipments before edging lower on Tuesday. A senior Iranian official told Reuters that mediators had proposed a 10-day ceasefire to preserve an interim agreement.
US forces struck the tanker Settebello in the Gulf of Oman on June 10, killing three Indian crew members when munitions hit the engine room and adjacent areas. Maritime tracking data indicate the vessel had transported Iranian oil under US sanctions for several years and conducted offshore transfers prior to the strike.
The US military described the action as a precision operation, while reports note the ship was stationary at the time.
Iranian officials reported strikes on US radar and air defense sites in Kuwait and Bahrain, along with the interception of two oil tankers in the Strait of Hormuz. The United States conducted strikes on Iranian targets following the deaths of three US soldiers, with the Pentagon stating the actions aimed to degrade capabilities affecting shipping.
Houthi forces in Yemen announced plans to blockade Saudi ports, while both US and Iranian leaders issued statements on further escalation.