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Oil Set for Big Weekly Losses as Tankers Exit Strait of Hormuz

Crude oil storage tanks at the Cushing hub in Oklahoma, USA (Reuters)
Crude oil storage tanks at the Cushing hub in Oklahoma, USA (Reuters)
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Oil Set for Big Weekly Losses as Tankers Exit Strait of Hormuz

Crude oil storage tanks at the Cushing hub in Oklahoma, USA (Reuters)
Crude oil storage tanks at the Cushing hub in Oklahoma, USA (Reuters)

Crude prices plunged by about 3% on Friday, on course for steep weekly losses, as more oil tankers exited the Strait of Hormuz, easing supply concerns, even though a cargo vessel was hit near Oman on Thursday.

Brent crude futures fell $2.42, or 3.2%, to $72.84 a barrel by 1323 GMT. US West Texas Intermediate lost $1.97, or 2.7%, to $69.95.

The Brent benchmark was heading for a weekly decline of about 9.7%, while WTI traded around 8.8% lower than its close last Thursday before the market closed for a public holiday last Friday, Reuters reported.

"The predominant view, it appears, remains one of imminent oversupply," said PVM analyst Tamas Varga.
Refining giant Saudi Aramco resumed oil loading on Friday at its Ras Tanura terminal in the Gulf after a nearly four-month halt, shipping data from LSEG showed.

Two Very Large Crude Carriers, which can load cargoes of 2 million barrels, loaded crude at the terminal while another waited nearby, the data showed.

"There is a general selloff as the market reacts to the increased flows exiting the Strait of Hormuz and China not yet picking up crude demand," said June Goh, senior oil market analyst at Sparta Commodities.

UNKNOWN PROJECTILE HITS VESSEL

Both benchmark contracts jumped more than 2% on Thursday after a cargo vessel was hit by an unknown projectile near Oman, prompting the UN's shipping agency to suspend its voluntary evacuation scheme.

Two US officials told Reuters that Iran fired on the cargo ship as it attempted to pass through the strait. Iranian authorities said the security of vessels passing outside designated Hormuz routes is not guaranteed. Iran on Friday reasserted its right to control shipping through the Strait of Hormuz. Data on Thursday showed that crude shipments through the strait rose this week to their highest since the US-Israeli conflict with Iran began at the end of February.

Despite the ceasefire deal that reopened the waterway, overall traffic is far below the pre-war daily average.

"If the number of transits does not increase more strongly next week either, scepticism in the market is likely to grow, so that the oil price is likely to rise again," Commerzbank analysts said on Friday. Meanwhile, Russian authorities are considering a diesel export ban for several months, state news agency TASS said on Friday. Although a major diesel exporter, Russia faces fuel supply issues after Ukrainian drone attacks have caused extensive damage to its oil refineries and other energy infrastructure.

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Business

Oil Rises on Renewed US-Iran Hostilities and Threat of Red Sea Closure

Drills operate in an oil field in California (Reuters)
Drills operate in an oil field in California (Reuters)
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Oil Rises on Renewed US-Iran Hostilities and Threat of Red Sea Closure

Drills operate in an oil field in California (Reuters)
Drills operate in an oil field in California (Reuters)

Oil prices rose by more than 2% on Friday after the US and Iran stepped up attacks across the Gulf, with shipping threatened by a potential Red Sea closure on top of the restricted traffic through the Strait of Hormuz.

Brent crude futures rose by $1.77, or 2.1%, to $86 a barrel by 1158 GMT. US West Texas Intermediate futures were up $1.91, or 2.4%, at $80.86.

Both benchmarks have climbed about 13% this week, with Brent on track for a third consecutive weekly gain and WTI set for its second.

Diesel refining margins hit record highs on Friday, with low-sulphur gasoil futures touching $66.25 over Brent crude.

The Middle East is a major diesel exporter and the Hormuz closure, as well as attacks on oil refineries, have tightened fuel markets and bolstered prices globally. The broken truce between the US and Iran has resulted in a drop in oil flows out of the strait.

Iran said it launched fresh strikes on US facilities in the Middle East on Friday, including the first direct attack in Syria, after a sixth straight night of US strikes on Iranian military facilities. US Central Command said on Thursday that American forces had begun a new wave of strikes against Iran to further degrade Iranian military capabilities. "Oil security is still a critical issue," International Energy Agency Executive Director Fatih Birol said on Thursday at a Council on Foreign Relations event in Washington.

"We should be worried, and I am worried, if the situation does not improve in the next few weeks," he said.

Business

Gold Heads for Biggest Weekly Loss in Six as Middle East War Fans Inflation Worries

16 March 2023, Bavaria, Munich: Gold bars and coins lie on the table at the Precious metal dealership Pro Aurum. (dpa)
16 March 2023, Bavaria, Munich: Gold bars and coins lie on the table at the Precious metal dealership Pro Aurum. (dpa)
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Gold Heads for Biggest Weekly Loss in Six as Middle East War Fans Inflation Worries

16 March 2023, Bavaria, Munich: Gold bars and coins lie on the table at the Precious metal dealership Pro Aurum. (dpa)
16 March 2023, Bavaria, Munich: Gold bars and coins lie on the table at the Precious metal dealership Pro Aurum. (dpa)

Gold was on track for its biggest weekly loss in six on Friday, as escalating US-Iran clashes lifted oil prices, adding to inflationary pressures and strengthening the case for higher US interest rates.

Spot gold was up 0.8% at $4,002.39 per ounce by 0624 GMT, having touched its lowest since July 1 earlier ‌in the day. US ‌gold futures for August delivery gained ‌0.4% ⁠to $4,006.10.

The metal has ⁠lost 3% so far this week, its largest decline since June 1, with the Middle East conflict outweighing support from softer June US inflation figures released this week.

"Gold is making tentative steps higher today after the sight of the metal slipping below $4,000 attracted some bargain hunting," said Tim Waterer, chief market analyst at ⁠KCM Trade.

However, "geopolitical risks in the Middle East ‌are still present, with inflation and yield ‌concerns being the dominant forces holding gold back," Waterer said.

Oil prices ‌have climbed about 12% this week as the escalating US-Iran conflict ‌raised supply concerns.

The surge in oil prices risks reigniting inflation worries and increasing the likelihood of interest rate hikes. Non-yielding gold typically struggles in a high-interest-rate environment, as investors gravitate towards assets offering higher returns.

Dallas Federal ‌Reserve President Lorie Logan became the first of Fed Chairman Kevin Warsh's new colleagues to ⁠call publicly for ⁠a rate hike.

Fed Vice Chair Philip Jefferson also suggested he would be open to raising rates if there is no near-term improvement in inflation.

Traders are pricing in a 73% chance of a rate hike in December, according to the CME FedWatch Tool.

Gold discounts in India widened to a one-month high this week as hopes of lower prices kept buyers on the sidelines, while premiums in China were largely steady.

Elsewhere, spot silver rose 0.6% to $55.83 per ounce, while platinum lost 1% to $1,602.02 and palladium eased 0.4% to $1,244.84. All three metals were headed for a weekly loss.

Business

Al-Jasser to Asharq Al-Awsat: Saudi Arabia is a Vital Artery for Global Trade

One of the agreements signed at Jeddah Islamic Port. Asharq Al-Awsat
One of the agreements signed at Jeddah Islamic Port. Asharq Al-Awsat
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Al-Jasser to Asharq Al-Awsat: Saudi Arabia is a Vital Artery for Global Trade

One of the agreements signed at Jeddah Islamic Port. Asharq Al-Awsat
One of the agreements signed at Jeddah Islamic Port. Asharq Al-Awsat

Saudi Minister of Transport and Logistics Services Saleh Al-Jasser told Asharq Al-Awsat that the recent crisis involving the Strait of Hormuz demonstrated the Kingdom's strong infrastructure and substantial investments, many of which have been implemented in partnership with the private sector.

He said the crisis also highlighted the flexibility of Saudi Arabia's logistics system and its ability to respond to changing circumstances by redirecting trade flows as needed, stressing that the Kingdom serves as a vital artery for global trade.

His remarks came during the signing of several agreements at Jeddah Islamic Port, including the launch of Bahri Logistics' bonded storage zone. The facility belongs to Bahri Logistics, a business unit of Saudi shipping firm Bahri, and was inaugurated in cooperation with the Zakat, Tax and Customs Authority and the Saudi Ports Authority (Mawani).

Al-Jasser said Saudi Arabia has been undergoing a rapid logistics transformation since Crown Prince and Prime Minister Mohammed bin Salman launched the National Transport and Logistics Strategy.

He noted that the current regional crisis provides a real opportunity to assess the progress made since the strategy's launch, adding that it has clearly demonstrated the sector's enhanced preparedness.

Al-Jasser explained that before 2023, most of Saudi Arabia's trade activity was concentrated on the Kingdom's western coast, with approximately two-thirds of trade passing through eastern ports.

However, disruptions in the Red Sea during 2023 prompted the transfer of a significant share of Saudi trade to the eastern coast. With the emergence of the latest regional crisis, trade has now been redirected back to the western coast.

He stressed that this logistical flexibility benefits not only Saudi Arabia's own trade but also that of neighboring countries, adding that reforms implemented across the sector are now beginning to produce tangible results.

Commenting on the newly established truck logistics zone, Al-Jasser said it reflects the speed of response and the integrated coordination between the transport sector, customs authorities, and the private sector.

He explained that the sharp increase in the number of ships and trucks created the need for the facility, which is designed to improve logistics efficiency, particularly as operational capacity has expanded significantly.

The new zone will streamline truck entry and exit procedures, provide a safer and more organized environment for truck drivers, improve traffic management, and reduce congestion caused by the tens of thousands of trucks entering Jeddah Islamic Port each day.

Al-Jasser also announced the signing of seven contracts for new logistics zones at the port.

Among them is the largest overseas investment by Chinese company JD Logistics, which will establish operations inside the port.

Another agreement covers a logistics project in the Al-Khumrah area south of Jeddah, while five leading Saudi companies have also signed agreements to develop additional logistics zones.

He noted that the number of logistics zones across Saudi ports has now reached 34, supported by approximately SAR15 billion in private-sector investments.

Saudi Ports Authority (Mawani) President Suliman Al-Mazroua told Asharq Al-Awsat that additional investments are expected in the Al-Khumrah area as part of a major economic zone designed to attract further investment, noting that several promising opportunities are currently under development.

Al-Mazroua said the real value of logistics hubs lies not simply in serving as cargo transit points, but in the integrated services they provide, transforming Saudi ports into value-added platforms that enhance the competitiveness of global supply chains.

He explained that shipping companies increasingly choose to call at Jeddah Islamic Port because of the value-added services offered by its logistics centers, which remain the port's primary competitive advantage.

Al-Mazroua added that Jeddah Islamic Port has evolved beyond being merely a point of arrival and departure for ships. It has become a preferred destination for international shipping companies thanks to its advanced logistics infrastructure.

Saudi Arabia now operates 34 logistics centers, including 17 located within Jeddah Islamic Port itself, underscoring the port's central role in the Kingdom's national transport and logistics network.

The newly inaugurated bonded logistics zone is Bahri's first fully integrated logistics facility of its kind. It offers a range of advanced logistics solutions that support Saudi Arabia's ambition to establish itself as a global logistics hub capable of attracting cargo, facilitating international trade, and strengthening global supply chains.