-- Global oil benchmarks posted a weekly decline on Friday after prices fell below the $100 per barrel mark earlier this week following the US-Iran ceasefire agreement.
West Texas Intermediate closed Friday at $95.63/bbl, down from $111.54/bbl the previous week, while Brent futures settled at $94.36/bbl, down from $109.24/bbl a week earlier.
"Saudi Arabia said its production capacity has been reduced due to attacks on energy infrastructure, though futures remain on track for their biggest weekly loss since June, down more than 10% this week after the US and Iran announced a ceasefire," Saxo Bank analysts noted.
The week began with prices over $110/bbl on Monday as the conflict involving the US, Israel, and Iran intensified.
However, the trajectory broke sharply on Wednesday following President Trump's announcement of a two-week "bombing suspension" and ceasefire mediated by Pakistan.
This triggered a historic relief crash, with WTI May futures and Brent June futures both shedding nearly 16-20% in a single session, briefly touching lows near $93-$94 as traders priced in a potential reopening of the Strait of Hormuz.
However, the risk premium began to seep back into the market as optimism over the ceasefire faded as Tehran accused Washington of breaching the truce's 10-point framework on Thursday, citing continued US drone incursions and strikes in Lebanon.
Meanwhile, US President Donald Trump warned Iran on Thursday amid reports that Tehran has started charging transit fees on tankers navigating the Strait of Hormuz, as shipping through the key waterway remains largely restricted despite the ceasefire deal.
Despite the diplomatic breakthrough, shipowners remain paralyzed by war-risk insurance premiums, disrupted tanker rotations, and the lingering threat of Iranian transit fees in the Strait of Hormuz.
Maritime data showed that only a handful of non-Iranian tankers had successfully transited the Strait of Hormuz since the ceasefire began, as global shipping giants like Hapag-Lloyd refused to resume routes until security is guaranteed.
Even with the ceasefire holding, ANZ analysts expect only a partial recovery of 2-3 million barrels per day in the near term, with a credible risk that 1-2 mb/d of capacity may be permanently lost due to infrastructure damage.
J.P. Morgan analysts said that "in the nearly six weeks since the conflict began, more than 60 energy infrastructure assets in the Gulf have been affected by drone and missile strikes, with roughly 50 sustaining different degrees of damage."
Over 80% of countries are net oil importers, leaving the majority of global economies exposed to rising energy costs and supply disruptions during the shock, the International Monetary Fund said Thursday.
The drop in supply has also disrupted refining operations, as facilities struggle to maintain minimum throughput levels amid reduced crude availability, the IMF added.
On the supply side, US crude stockpiles rose by 3.1 mmbbls to 464.7 mmbbls in the week ended Apr. 3, the Energy Information Administration said in its weekly report on Wednesday.
The number of oil rigs in the US held steady at 411 from last week, in the week ending Apr. 10, according to data from Baker Hughes (BKR) released Friday. The US had 472 oil rigs in operation a year earlier.
The consolidated North American oil and gas rig count, a key early indicator of future production levels, dropped by 10 to 680 from 690 the previous week.
Money managers in the WTI crude futures and options markets maintained their net long positions in the week ended Apr. 7, according to the Commodity Futures Trading Commission's latest Commitments of Traders report released Friday.
The data showed that money managers reported 223,091 long positions, up 8,334 from Mar. 31, while short positions were also up 1,213 to 85,253.