Follow our live coverage here.
SINGAPORE – Oil rose a second day on April 10, but is still on track for its biggest weekly loss since June, after Saudi Arabia’s production capacity was cut due to attacks on energy infrastructure.
The US benchmark, West Texas Intermediate, advanced 0.4 per cent to US$98.26 a barrel as at 7.20am Singapore time, after adding 3.7 per cent on April 9 in choppy trading. It is still down more than 10 per cent this week after the United States and Iran announced a ceasefire on April 7.
Saudi Arabia’s press agency said the nation’s oil production capacity has been cut by around 600,000 barrels a day due to attacks on energy infrastructure. That figure accounts for roughly 10 per cent of the kingdom’s normal crude exports, according to Bloomberg calculations.
Meanwhile, strikes on a pumping station serving the East-West pipeline – which Saudi Arabia has been using to export crude via the Red Sea – crimped daily throughput by 700,000 barrels this week, according to the report. Kuwait, meanwhile, said it was intercepting drone attacks and that some vital facilities were targetted.
“The drop in East-West pipeline throughput weakens Saudi’s Hormuz bypass strategy and highlights persistent supply risks,” said Mohith Velamala, a global oil analyst at BloombergNEF. “This further complicates crude availability in Asia.”
US President Donald Trump said on April 9 he was “very optimistic” about a deal with Iran and said Israel was “going to low-key” it with strikes on Tehran-backed Hezbollah militants in Lebanon, although Israeli Prime Minister Benjamin Netanyahu also reiterated his position that the ongoing attacks weren’t part of the US-Iran ceasefire agreement. Mr Trump later threatened Tehran over charging fees in the Strait of Hormuz.
“There are reports that Iran is charging fees to tankers going through the Hormuz Strait,” Mr Trump wrote on social media. “They better not be and, if they are, they better stop now!”
Focus will now shift to Islamabad, where Vice President JD Vance is expected to lead the US delegation in discussions with Iranian officials on April 11. A key issue will be the Strait of Hormuz, the near-closure of which since end-February has disrupted a fifth of global oil and liquefied natural gas flows – triggering a severe supply shock.
Mr Trump described Iran’s leaders as “much more reasonable” than their public comments would suggest in a phone interview with NBC News. However, Iran’s new supreme leader, Mojtaba Khamenei, said in a statement on Telegram that Iran “will definitely bring the management of the Strait of Hormuz to a new stage,” though it was unclear if he was referring to past Iranian demands to retain control of the waterway that the US has rejected.
“The market is refocusing on the reality of flows through the Strait of Hormuz, which remain far from normalised and are unlikely to snap back quickly,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth Group.
Oil markets have been extremely turbulent since the war began, forcing traders to hold smaller positions for shorter periods as they run into risk limits. Prices have swung by an average of more than US$9 a day since the conflict began, the largest daily swings in years. BLOOMBERG
