5 hrs ago
Oil Falls as Hormuz Shipments and Supply Risks Reemerge
Oil prices went down after rising sharply the day before.
Traders are watching whether oil ships can safely pass through the Strait of Hormuz.
A US official gave a high estimate for how much oil is crossing, but another group gave a lower estimate.
Saudi Arabia may restart a pipeline that could move oil without using the strait.
Diesel fuel prices in the United States have reached a record.
Some lawmakers want to limit diesel exports so more fuel stays in the country.
The administration is considering asking refiners to reduce shipments voluntarily instead.
Fighting and diplomatic disagreements involving Iran are making traders unsure about future oil supplies.
Brent fell below $102 a barrel and West Texas Intermediate neared $91 after oil surged almost 4% Wednesday.
US Treasury Secretary Scott Bessent said as many as 17 million barrels sometimes transit the Strait of Hormuz daily, while Clarksons Research estimated about 8 million earlier this month.
Traders are awaiting Saudi Arabia’s plans to restart exports through its damaged East-West pipeline to reduce reliance on Hormuz shipping.
Record US diesel prices have prompted lawmakers to seek export restrictions, while the administration is considering voluntary limits with refiners instead.
Shipping attacks continue in Hormuz as US-China diplomacy and possible talks involving Iran remain in focus.
- Who
- Oil traders, US officials, Saudi Arabia, Iran, and shipping operators are central to the developments.
- What
- Oil prices declined as attention returned to Middle Eastern shipments, Hormuz traffic, Saudi pipeline plans, and fuel-export restrictions.
- Where
- The main developments involve the Strait of Hormuz, Saudi Arabia’s Red Sea coast, the United States, and Iran.
- When
- The price decline followed a surge of almost 4% on Wednesday; Saudi pipeline damage occurred earlier this month.
- Why
- Markets are weighing whether crude shipments can continue despite attacks, infrastructure damage, and the US-Iran war.
Support for Restrictions
Preference for Continued Shipments
Diesel exports
Support for Restrictions
Some US lawmakers are pushing for export curbs after domestic diesel prices reached a record.
Preference for Continued Shipments
Energy Secretary Chris Wright said the administration is working with refiners to voluntarily reduce shipments instead of imposing an outright ban.
Hormuz oil flows
Support for Restrictions
Lower estimates, including Clarksons Research’s roughly 8 million barrels per day, suggest that flows may be more limited than some US officials indicate.
Preference for Continued Shipments
Scott Bessent said as many as 17 million barrels sometimes pass through the Strait of Hormuz daily, suggesting major volumes continue to move.
Diplomatic outlook
Support for Restrictions
Energy strategist Walt Chancellor said optimism about a speedy diplomatic solution and the easing of disruptions has diminished.
Preference for Continued Shipments
Potential diplomatic openings remain possible, including President Donald Trump’s planned discussion of Iran with Chinese President Xi Jinping.
Key facts
- Brent price
- Below $102 a barrel
- West Texas Intermediate
- Near $91 a barrel
- Recent oil move
- Oil had surged almost 4% on Wednesday
- US Hormuz estimate
- Scott Bessent said 17 million barrels sometimes transit daily
- Clarksons Research estimate
- About 8 million barrels transited daily earlier this month
- Saudi pipeline
- The East-West pipeline was damaged in attacks earlier this month
- Diesel prices
- US retail prices reached a record
Quotes
Walt Chancellor
Energy strategist at Macquarie Group
“Optimism around speedy diplomatic solutions to the war and associated energy disruptions seems to have been greatly diminished”
livemint.com
Sources
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