In a virtual repeat of trading patterns and motivations of the previous session, oil prices on Friday made modest gains, as political pundits looked ahead to Monday to see the reaction when U.S. president Donald Trump makes good on his vow to begin isolating Iran’s economy.
Friday also saw Iran blink for the first time in the standoff between Tehran and Washington, with Iranian president Masoud Pezeshkian calling for an end to the war between the two countries, acknowledging the financial toll it has taken, and appearing to criticize the hardliners of his country as “sitting outside the circle.”
Brent settled up 61 cents at $94.39 per barrel, and West Texas Intermediate settled up 23 cents at $87.06 per barrel; for the week, Brent gained 6.3 percent while WTI rose 5.6 percent.
An emerging loose consensus among analysts was that Iran seemed to be on the ropes: John Kilduff, founding partner at Again Capital, said, “Sanctions have been the only thing to bring Iran to heel.”
While Iran continued to threaten a “devastating” response to U.S. hostilities, Crispus Nyaga, research analyst at Empire FX, remarked, “The immediate impact on supply may be limited as Iranian exports are already heavily constrained by the U.S. naval blockade.”
Phil Flynn, senior market analysts at Price Futures Group Inc., suggested that the Strait of Hormuz is no longer front page news, despite press doves persistently sounding the alarm over continued transit blockages.
“Hormuz is still a problem, but it is no longer the only story,” he wrote in a note, adding that “pipelines, shuttles, U.S. shale, a recovering (if bottlenecked) Venezuela, and an unconstrained United Arab Emirates are all adding barrels.”
It fell upon Helima Croft, head of global commodity strategy at RBC Capital Markets, to inject some skepticism into the idea that Washington’s strategies against the Islamic republic may be finally paying off: she noted that the country is already one of the most sanctioned countries in the world, and that its leaders appear to believe it can still outlast the U.S.
She added, “The Strait of Hormuz is not closed but we still estimate that we’re losing from this war about 8 million barrels per day [bpd].”
Still, the U.S. military told media it has helped tankers transport more than 660 million barrels of oil through Hormuz since early May.
In other oil news on Friday, tanker tracking data showed that Saudi Arabia has boosted its crude oil exports from Egypt’s Mediterranean port of Sidi Kerir by about 33 percent in the month since the Houthis threatened Saudi oil shipments in the southern Red Sea and Bab el-Mandeb strait.
Western ship operators including South Korea’s Sinokor, Norway’s DHT Management, and Greece’s Dynacom, have been helping Aramco transport crude from the Red Sea in a northern direction.