Brent loses as market eyes Iran-Oman agreement
The front-month ICE Brent contract has lost by $0.80/bbl on the day, to trade at $79.50/bbl at 09.00 GMT.
IMAGE: Crude oil storage facility. Getty Images
Upward pressure:
Brent’s price has felt some upward pressure as the broader Middle East conflict, extending to the Red Sea, escalated.
Yemen’s Iran-aligned Houthi militants have struck multiple cargo ships in the Red Sea this week, causing one vessel to capsize and sink.
The India-flagged oil tanker MSV Faize Noore Oliya drowned off the coast of Yemen in the Red Sea yesterday, after being hit by a projectile.
Threats in the Red Sea persist, despite ongoing diplomatic channels between Washington and Tehran, prompting several tankers carrying Saudi crude to take a U-turn ahead of the Bab al-Mandeb Strait.
Market optimism “was tempered by reports that Houthi militants had targeted a Saudi Arabian oil tanker,” ANZ Bank’s senior commodity strategist Daniel Hynes said.
Downward pressure:
Brent’s price has slipped below $80/bbl mark as the global oil market awaits a final decision from Iran and Oman, on a draft agreement to reopen the Strait of Hormuz to commercial vessels.
The agreement is in its “final stage,” according to an Iranian official speaking to the Associated Press.
If finalised, the agreement has a potential to reopen the critical waterway – easing some pressure on the world economy.
“Crude oil extended recent losses, as signs of a deal on the reopening of the Strait of Hormuz intensified,” Hynes added.
By Aparupa Mazumder
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