Oil prices were climbing back toward the $100 mark in early Asian trade on Friday as traders weighed fresh attacks across the region and doubts over whether the already-fragile Iran ceasefire will hold.
At the time of writing, WTI was trading at $99.17, up 1.33%, while Brent had climbed 0.92% to $96.80.
On the supply side, Saudi Arabia’s energy ministry has confirmed that recent attacks on the Kingdom have cut its oil production capacity by roughly 600,000 bpd and reduced flows through the East-West pipeline by around 700,000 bpd. The Kingdom also confirmed that a Saudi national had been killed in recent attacks on its energy infrastructure.
Elsewhere, Kuwait reported a new wave of drone attacks targeting vital infrastructure, although Iran denies launching any missiles toward any country since the ceasefire.
Israel’s Prime Minister Netanyahu insisted there is no ceasefire in Lebanon, but said direct peace negotiations have begun with the Lebanese government. This statement came after a wave of attacks across Lebanon on Wednesday led to at least 303 people being killed, according to the Lebanese health ministry.
Meanwhile, the ceasefire between the U.S. and Iran remains very fragile, with President Trump claiming on social media that Iran was doing a “very poor job” of allowing oil through the Strait and it was “not the agreement we have!”
Iran’s President, Masoud Pezeshkian, claimed that Israel’s attacks on Lebanon represent a breach of the ceasefire terms.
Only a handful of ships have transited the Strait of Hormuz since the ceasefire took effect, undermining hopes that supply might return to markets quickly.
Pakistan is set to host peace talks this weekend, but it may struggle to secure a durable agreement based on the signals coming from both Iran and the U.S. The most notable disagreements include ongoing attacks on Lebanon, Iran imposing a toll on tanker traffic, and nuclear enrichment.
For oil traders, sentiment continues to drive price swings, but the broader upward pressure on prices will continue to rise until oil flows and production return.
By Josh Owens for Oilprice.com
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