Oil prices edged lower in Friday trading but remained above $100 a barrel, with Brent crude falling 1.5% to $105.99 a barrel and U.S. West Texas Intermediate crude declining 1.3% to $101.20 a barrel, as supply disruptions persisted and shipping risks escalated in the Middle East.
Limited pullback after Thursday’s jump
Despite Friday’s decline, both benchmarks are on track to end the week above $100 a barrel for the first time in about four months, having risen more than 10% over the week in their biggest weekly gains since mid-July.
U.S. crude rose above $100 for the first time since May in Thursday trading, as fears that supply disruptions would widen sent prices into a fresh rally. Brent settled Thursday 6.34% higher at $107.63, while West Texas Intermediate jumped 6.69% to $102.48.
Vessel traffic through the Strait of Hormuz declines
The energy market is facing simultaneous risks at two of the most important maritime corridors. In the Strait of Hormuz, the number of vessels passing through fell to just 7 on Thursday, compared with 11 on Wednesday and an average of 15 vessels a day over the previous 10 days, according to Kpler data.
Before the war broke out on February 28, the strait handled about 125 large commercial vessels a day, including oil and gas tankers.
Risks rise near Bab el-Mandeb
Risks also increased at the southern entrance to the Red Sea after the Houthi Ansar Allah group seized the coastal city of Mokha, advanced south along the coast and reached the Hanish Islands, strengthening its influence over the approaches to the Bab el-Mandeb Strait.
Vessel traffic through the strait remained relatively stable, with 26 cargo ships passing through on Thursday, compared with an average of 27 over the previous 10 days.
Volumes equivalent to about 7% of global oil production pass through Bab el-Mandeb, according to Kpler data. Any major disruption in the strait could prompt more tankers to sail around the Cape of Good Hope, extending voyages and raising shipping costs.
