Oil prices head for biggest weekly drop in months after Middle East ceasefire
Kyiv • UNN
Brent and WTI crude oil prices rose on Friday but are ending the week with a decline of about 8% after the ceasefire between Israel and Hezbollah. Iran tightens control over the Strait of Hormuz, requiring permission for vessel passage.
World oil prices rose slightly on Friday, but are set to end the week with a drop of about 8% amid the ceasefire agreement between Israel and Hezbollah in Lebanon. At the same time, markets continue to closely monitor the situation around the Strait of Hormuz, through which a significant portion of global oil supplies pass, Reuters reports, writes UNN.
Details
Brent crude oil futures rose 0.53% to $80.38 per barrel, while US WTI increased by 1.23% to $77.54. Despite this, Brent lost about 8% for the week due to easing concerns about supply disruptions after the agreement between the US and Iran to end the war.
Iran tightens control over passage through the Strait of Hormuz
After the ceasefire announcement, the Gulf countries began preparing to increase oil exports. According to MarineTraffic, at least four tankers have already entered the Strait of Hormuz, heading to Iraqi ports. However, Tehran simultaneously signals its intention to tighten control over shipping.
Iranian state media reported that vessels must coordinate passage through the strait with the naval forces of the Islamic Revolutionary Guard Corps.
In a document seen by Reuters, Iran's Persian Gulf Administration also stated that "no vessel may pass through the Strait of Hormuz without a valid transit permit." It is these signals from Iran that partly supported the rise in oil prices at the end of the week.
The market was pricing in the agreement and its fairly smooth implementation, and it seems that is not what we are getting so far
Analysts believe that the concluded agreements could return more than 85 million barrels of oil to the global market that were blocked in the Persian Gulf region. Citi forecasts a gradual formation of a surplus in the oil market and a decline in prices to $60-65 per barrel by early 2027, if the current stabilization of the situation persists.