(RTTNews) – Reversing the gains from yesterday’s session, crude oil prices have plunged on Friday as optimism increases on resumption of oil flow from the Arab region, overshadowing a sudden projectile attack incident on a cargo ship sailing across the Strait of Hormuz yesterday.
WTI Crude Oil for August month delivery was last seen trading down by $2.60 (or 3.62%) at $69.32 per barrel.
The confidence boost oil and energy traders received following last week’s U.S.-Iran Memorandum of Understanding is holding up as shipping traffic across the Strait of Hormuz improved.
Data from S&P Global MINT and S&P Global Commodities at Sea revealed that around 78 vessels passed through the strait since the announcement of the deal, indicating a recovery in both vessel movements, and consequently, the oil volumes.
Reportedly, nearly 40% of the transits (or 33 vessels) transited via this route during daytime and a majority of them (25 vessels) were outbound which had been trapped inside the gulf region.
Others sailed close to Iran’s territorial waters while eight moved through “dark passage”. Inbound movements comprised 37% of total traffic.
Safety-related concerns continue to trouble fleet owners, both due to surprise attacks from air or water as well as due to the risk of navigating over sea mines planted by Iran during the conflict. According to the MoU, Iran must clear all the sea mines over a period of 30 days.
Yesterday, the U.K. Maritime Trade Operations center announced that a Singapore-flagged container belonging to Taiwan’s Evergreen Marine (named Ever Lovely) traveling through a new U.N. backed route was struck by an unknown projectile on the starboard side.
The attack came 7.5 nautical miles southeast of Dahit, in Oman’s Musandam exclave. Though no casualties or environmental damages were reported, the UKMTO advised vessels to pass through this area with caution.
The United Nation’s International Maritime Organization paused its evacuation initiative after this incident.
Iran’s Persian Gulf Strait Authority that is now managing requests to travel through the Strait of Hormuz warned that vessels moving outside the routes specified by Iran will not be guaranteed a safe passage.
The incident reignited concerns about the longevity of the U.S.-Iran Memorandum of Understanding recently signed offering a 60-day period of ceasefire to both nations.
U.S. President Donald Trump criticized the attack as a foolish violation of the ceasefire agreement.
However, ship-tracking data from LSEG and MarineTraffic showed that at least four tankers entered the gulf region to load up.
While Iran continued to claim it controls the Strait of Hormuz management, U.S. Secretary of State Marco Rubio reassured yesterday that the channel will be available free for all ships.
Kpler data revealed that tanker traffic reached 13 transits today in both directions compared to 24 yesterday and 27 on Wednesday.
With prevailing deep disagreements between the U.S. and Iran over financial incentives to Iran, nuclear inspections on Iran’s sites, and control over Strait of Hormuz in addition to Iran’s demand for Israel to end its war with Lebanon, experts are waiting to see how the negotiations unfold in the coming days.
The U.S. dollar index was last seen trading at 101.33, down by 0.18 (or 0.18%) today.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
www.nasdaq.com