Media reports about a blast disrupting oil loadings at Oman’s main terminal pushed benchmark prices higher earlier today, in the latest sign that any hopes about an end to Persian Gulf hostilities is probably premature.
At the time of writing, was trading at $95.37 per barrel, and was changing hands for $93.04 per barrel on the futures market, modestly up on Thursday, when prices dropped on reports about a ceasefire between Israel and Hezbollah. Later news coverage, however, revealed that Hezbollah has rejected the U.S.-brokered ceasefire, dampening hopes of an end to Israeli strikes on Lebanon and, by extension, the hostilities between the United States and Iran. Iran has conditioned any peace deal on a ceasefire for Lebanon.
Loadings at the Mina Al Fahal terminal have been delayed by several days, Bloomberg reported today, citing unnamed trading sources. Separately, Reuters reported that the explosion was the result of a drone attack on the terminal.
What makes the news significant is the fact that Oman is just outside the Strait of Hormuz and, as such, has seen a surge in interest from oil buyers, on the assumption that it will not be dragged into the hostilities.
Indeed, India earlier this week sealed a trade agreement with the Gulf state to secure oil imports that do not have to pass through the Strait of Hormuz. The country is heavily dependent on the Strait of Hormuz for its energy imports, with 45% of its crude oil purchases originating in the Persian Gulf, along with 55% of liquefied gas imports.
“Any optimism remains heavily clouded by a tangled web of headlines and counter-headlines,” IG analyst Tony Sycamore said in a note, as quoted by Reuters earlier today. “From a technical perspective, as long as (WTI) crude oil remains above trendline support in the low $80s, the risks remain skewed to the upside,” he added.