WTI crude fell to $83.51 late Thursday, down 3.61% for the week, as traders sold on reports of a shipping arrangement through the Strait of Hormuz. Tanker traffic and Asian oil imports remain well below pre-war levels, undercutting the size of the selloff.
WTI crude oil futures traded at $83.51 late Thursday, down $3.13, or 3.61%, for the week, after the market opened near its weekly high of $86.57 and broke to $79.62 on reports that Iran, Oman and the United States were nearing a shipping arrangement through the Strait of Hormuz.
Thursday reversed the move. Iran fired on a vessel near Oman, and President Trump rejected terms tied to reviving June's ceasefire agreement, so the market stopped pricing a Hormuz reopening and started pricing the absence of a final deal.
Iran and Oman signal an understanding, not a reopening
Iran's Revolutionary Guards announced an agreement with Oman over control and revenue sharing in the Strait, which was enough to trigger selling because traders priced in more Middle East barrels reaching buyers. But a senior Iranian source said the deal remains unfinished: Tehran wants the war ended, sanctions relief, an end to the port blockade and compensation before it lets ships use the central channel, conditions Washington has not accepted.
Tanker traffic still lags well behind normal
Ten commodity vessels crossed Hormuz Wednesday, up from eight the day before, but still far short of the 10-day average of 15, and a vessel was struck Thursday as it tried to move through the area. Hormuz oil flows averaged just 2.3 million barrels per day in August, against a pre-war throughput equal to roughly 20% of global oil and LNG shipments.
Asian crude imports, meanwhile, fell to 23.12 million barrels per day in August from 23.36 million in July, well below the 26.91 million-barrel prewar average, while India's Middle East arrivals ran near half of prewar levels.
Weekly losses accelerate into Friday
The pullback continued into Friday. Brent crude slipped 5 cents to $89.65 a barrel, on track for a 5.3% weekly drop, while WTI fell 41 cents, or 0.49%, to $83.12, down 4.7% on the week.
Goldman Sachs estimated total Gulf oil exports at 15 million to 16 million barrels per day, 7 million to 8 million bpd below pre-war levels but 5 million to 6 million above March's low point.
Fuel demand data complicates the picture
The EIA reported commercial crude inventories rose 100,000 barrels even as crude imports fell 435,000 barrels per day to 6.2 million barrels per day, leaving stocks at 428.9 million barrels, 1% above the five-year average. Still, gasoline inventories fell 2.5 million barrels to 6% below the five-year average, and distillate stocks dropped 2.2 million barrels to 14% below average, even with refiners running at 97.4% of capacity.
WTI is trading as a market that sold a corridor that has not opened, with tanker traffic and Asian imports still confirming little of the reopening traders have priced in.
Sources: Oilprice.com, Commodities & Futures News
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