Oil dips as strait shipments resume after vessel hit near Oman

• Brent crude fell 0.25% to $75.07/barrel and WTI dropped 0.18% to $71.79/barrel, with both benchmarks set for approximately 7% weekly losses
• Iran fired on a cargo ship attempting to pass through the strait, warning that vessel security outside designated Hormuz routes is not guaranteed, though overall traffic remains a fraction of pre-conflict levels (125 ships daily)
• Venezuela earthquakes raised additional supply concerns, with doubts about sustaining its 1.2 million barrels per day output due to power outages, though preliminary assessments showed limited infrastructure damage

Market Summary: Oil Prices Decline Despite Strait of Hormuz Tensions

Key Price Movements

Oil prices fell Friday morning, with Brent crude down 0.25% to $75.07/barrel and WTI crude declining 0.18% to $71.79/barrel as of 0055 GMT. Both benchmarks are heading for steep weekly losses of approximately 7%, despite a 2% jump Thursday following a security incident.

Main Event

A cargo vessel was struck by an unknown projectile near Oman on Thursday. Two U.S. officials reported that Iran fired on the ship attempting passage through the Strait of Hormuz. Iranian authorities warned that vessel security outside designated routes cannot be guaranteed, prompting the U.N.'s shipping agency to suspend its voluntary evacuation scheme.

Supply Developments

Despite tensions, crude shipments through the Strait of Hormuz reached their highest level since the U.S.-Israeli conflict with Iran began in February, following a ceasefire deal that reopened the waterway. However, overall traffic remains a fraction of the pre-conflict daily average of 125 ships.

Additional Supply Concerns

Earthquakes in Venezuela on Thursday raised additional supply worries. While preliminary assessments showed limited damage to oil infrastructure, power outages have created uncertainty about sustaining the country's pre-earthquake output of approximately 1.2 million barrels per day.

Market Implications

Analyst Tony Sycamore of IG noted that geopolitical risk premiums are creeping back into prices. Markets are closely monitoring whether tanker traffic will continue or if supply disruptions will force producers to delay planned production increases. The situation highlights ongoing vulnerability in global oil supply chains despite recent supply improvements.