-- Oil prices eased on Friday and were headed for a weekly decline after the US-Iran ceasefire deal which effectively slashed the geopolitical risk premium, even as the agreement gets off to a very shaky start.
The front-month West Texas Intermediate crude contract was down 0.5% at $97.41 per barrel. Brent futures eased 0.5% to $65.98/bbl.
Both contracts were headed for a weekly fall of about 12%.
"Crude prices try to stabilise below [$]100 following the sharpest weekly drop since last June yet remain underpinned by mixed signals surrounding the proposed peace plan, a roughly 600,000 b/d cut in Saudi production capacity, and the effective closure of the Strait of Hormuz since late February," Saxo Bank analysts said.
An April 9-dated news article by the Saudi Press Agency citing the Energy Ministry referred to an attack "recently" on a pumping station on the East-West pipeline, which it said caused a loss of about 700,000 barrels in throughput.
It did not make mention of the origin of the attack but a source told Reuters on Wednesday that it came from Iran, damaging Saudi Arabia's main alternative route to export markets since the closure of the Strait of Hormuz.
"Meanwhile, spot Brent transactions continue to clear at notable premiums to futures, underscoring mounting supply stress as refiners scramble to replace disrupted Middle East flows," Saxo Bank added.
June Brent futures have retreated below $100 per barrel following the ceasefire announcement. Yet cargoes already at sea priced by Dated Brent, the global benchmark for immediate delivery, remain stubbornly above $120.
US President Donald Trump gave a warning to on Thursday amid reports that Tehran has started charging transit fees on tankers seeking to exit the Strait of Hormuz. Shipping through the key waterway remains restricted despite the ceasefire deal.
"There are reports that Iran is charging fees to tankers going through the Hormuz Strait," Trump said in a social media post on Truth Social, "They better not be and, if they are, they better stop now!"
According to TRM Labs' Thursday note, Iran's new toll framework requires payments of up to $2 million per vessel payable in cryptocurrency or Chinese yuan generating an estimated $20 million in daily revenue for Tehran.
Further tightening the squeeze, Russia's Tass news agency reported, citing a senior Iranian source, that Iran will continue to limit the movement of ships.
The source reportedly said that under the current ceasefire, "fewer than 15 ships per day" will be permitted to sail via the Strait of Hormuz, according to the report.
All eyes are now on high-stakes talks between a US delegation and Iranian officials scheduled for this weekend.