Crude oil futures dipped slightly on Thursday after Iran’s state media said about 30 vessels had crossed the Strait of Hormuz in recent hours, while the semi-official Fars news agency cited a source saying Iran had begun allowing transit for some Chinese vessels.
Brent crude oil futures were down 73 cents, or 0.7%, at $104.90 a barrel at 11:21 a.m. ET (1521 GMT), easing from an earlier high of $107.13. U.S. West Texas Intermediate futures were down 20 cents, or 0.2%, at $100.82. Both contracts fell on Wednesday as investors worried about possible US interest rate hikes as higher fuel prices spur inflationary pressures. Brent crude futures lost more than $2 a barrel, while WTI futures dropped more than $1.
Ship seized off UAE, heads towards Iran
However, a ship anchored off the east coast of the United Arab Emirates has been seized and is heading towards Iranian waters, the British military said on Thursday.
The United Kingdom Maritime Trade Operations centre said it received reports that the ship seized was taken by unauthorised personnel while anchored 38 nautical miles (70 kilometres, 44 miles) northeast of the UAE port of Fujairah.
Also Read: Iran allows Chinese ships to cross Strait of Hormuz as China backs Trump’s call to open it
The UK maritime centre did not name the ship seized on Thursday and said it is investigating. The British military said the vessel is heading towards Iranian waters. Fujairah is an important oil export terminal and the UAE’s main port outside of the Persian Gulf. It has been repeatedly attacked during the war with Iran.
The seizures also happened hours after Prime Minister Benjamin Netanyahu announced he had quietly visited the UAE during the Israeli-US war with Iran, though the UAE swiftly denied that any secret visit had occurred.
Meanwhile, a Panama-flagged crude oil tanker managed by Japanese refining group Eneos has also passed through the strait, ship-tracking data from LSEG showed on Thursday, the second instance of a Japan-linked oil ship making it through. “The growing number of vessels allowed through has a more tangible impact on sentiment than on the actual supply-demand balance,” PVM oil market analyst Tamas Varga said.
“Whilst it might contribute to setting a price ceiling in the immediate future, it is not the desired recipe to send oil prices meaningfully lower.”
Global oil supply will fall short of total demand this year as inventories are drained at an unprecedented pace, the International Energy Agency (IEA) said on Wednesday. In the US, crude inventories fell by 4.3 million barrels to 452.9 million barrels for the week ended May 8 on rising exports, the EIA said.
Also Read: Big US military action against Iran coming up? Trump reportedly ‘frustrated’ with stalled talks
Iran allowing transit of Chinese vessels in strait
Iran has begun allowing some Chinese vessels to transit through the Strait of Hormuz following an understanding over Iranian management protocols for the waterway, the semi-official Fars news agency said on Thursday, citing an informed source.
Before the Fars report, a Chinese supertanker carrying 2 million barrels of Iraqi crude sailed through the strait on Wednesday after being stranded in the Gulf for more than two months. The source told Fars news the move followed requests by China’s foreign minister and ambassador to Iran, with Tehran agreeing to facilitate the passage of a number of Chinese ships in line with the two countries’ strategic partnership.
With inputs from Associated Press
