International crude oil prices fell by about 2 percent on Friday (June 26) as oil tanker traffic through the Strait of Hormuz increased, easing concerns over improving supply conditions and weaker-than-expected global demand.
As of 4:21 a.m. GMT, Brent crude oil prices fell $1.47, or 1.95 percent, to $73.79 a barrel. At the same time, West Texas Intermediate (WTI) oil prices fell $1.44, or 2 percent, to $70.48 a barrel.
The market has also been positively impacted by the activities of Saudi Arabia’s state oil company, Saudi Aramco. After a nearly four-month shutdown, crude oil loading has resumed at the Ras Tanura terminal in the Gulf region. According to shipping information, two very large VLCC tankers are currently loading oil and another ship is waiting. Each ship can carry about two million barrels of crude oil.
Jun Goh, senior oil market analyst at Sparta Commodities, said that increased oil supply through the Strait of Hormuz and less-than-expected demand in the Chinese market have created selling pressure in the international market, which has had a downward impact on prices.
However, market uncertainty has not completely disappeared. Oil prices rose more than 2 percent the day before after an unidentified attack on a cargo ship off the coast of Oman, which led the International Maritime Organization (IMO) to temporarily suspend its voluntary program to evacuate ships safely.
Two US officials told Reuters that Iran attacked the tanker as it passed through the Strait of Hormuz, although Iran has insisted it is not responsible for the security of ships sailing outside designated waterways.
According to analysts at ING Bank, most of the oil tankers currently operating in the Gulf were stranded during the conflict. Once these ships leave, oil transport could slow down again in the future.
Meanwhile, a recent powerful earthquake in Venezuela has raised new concerns about oil supplies, but there has been no evidence of major damage to the country’s main oil fields, refineries, pipelines and export infrastructure.