Oil prices fall amid discussions between the US and allies on efforts to increase supplies and open the Strait of Hormuz
Kyiv • UNN
Brent crude fell to $107 due to US plans to lift sanctions on Iranian cargoes. G7 countries are preparing measures for security in the Strait of Hormuz.
Oil prices fell by more than 1% on Friday, as the US outlined steps to resolve the oil supply crisis, while leading European countries, Japan, and Canada proposed joining forces to ensure the safe passage of ships through the Strait of Hormuz, UNN reports with reference to Reuters.
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Brent crude futures for May delivery fell by $1.58, or 1.45%, to $107.07 per barrel at 12:20 GMT (14:20 Kyiv time). US West Texas Intermediate (WTI) crude futures for April delivery, which expire on Friday, fell by $1.30, or 1.35%, to $94.84. The more liquid WTI crude futures contract for May delivery was $94.30, down $1.25, or 1.31%.
At these levels, Brent crude was heading for a weekly gain of 3.8%, while next-month WTI crude was down about 3.9% from last Friday's close. On Wednesday, the WTI discount to Brent reached its largest level in 11 years.
On Friday, Israel and Iran exchanged new attacks after an attack on an oil refinery in Kuwait.
On Friday, US Energy Secretary Chris Wright said that lifting oil sanctions on stranded Iranian cargoes transported by water would allow oil to be delivered to Asia within three to four days. He added that more oil is needed in Asia and the US is playing a role in a coordinated release from strategic reserves. The release will take place over the next few months, Wright said.
His comments came after US Treasury Secretary Scott Bessent said on Thursday that the US could soon lift sanctions on Iranian oil stranded on tankers, and said that further releases of oil from the US Strategic Petroleum Reserve were possible.
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Also on Thursday, the UK, France, Germany, Italy, the Netherlands, and Japan, in a joint statement, expressed their "readiness to contribute to appropriate efforts to ensure safe passage through the strait."
Analysts continue to believe that prices will remain high as long as movement through the strait, through which 20% of the world's oil and LNG passes, is disrupted.
"The possibility of a quick reversal in energy prices is unlikely, as production has already been damaged," said Ole Hansen, head of commodity strategy at Saxo Bank. "In fact, tensions remain in the market."
"As long as oil supplies through the Strait of Hormuz remain constrained, the path of least resistance for oil prices, in my opinion, remains upward," said UBS analyst Giovanni Staunovo.
International Energy Agency (IEA) head Fatih Birol warned that the restoration of oil and gas supplies from the Persian Gulf could take up to six months, and that policymakers and markets are underestimating the scale of the disruptions, he said in an interview with the Financial Times on Friday.
Further supply disruptions are possible, as the Trump administration considers plans to occupy or blockade the Iranian island of Kharg to pressure Iran to reopen the Strait of Hormuz, Axios reported on Friday.
On Thursday, Brent crude jumped above $119 a barrel, nearing its March 9 peak, after Iran responded to an Israeli attack on a major gas field by disabling 17% of Qatar's liquefied natural gas production capacity, causing damage that will take up to five years to repair.
US President Donald Trump said he urged Israel not to repeat attacks on Iranian gas infrastructure. Israeli Prime Minister Benjamin Netanyahu said his country acted alone in the attack, and that Iran no longer has the ability to enrich uranium or produce ballistic missiles.