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EMEA Oil Update: Crude Plunges 10% Week-Over-Week as Hormuz Reopens

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Oil prices declined on Friday and tumbled more than 10% on a weekly basis as transit through the Strait of Hormuz resumed following the preliminary US-Iran peace deal.

Front-month Murban crude futures dropped by 4% to $66.30 per barrel to their lowest since February, while Brent futures slumped 3.7% to $72.47/bbl.

Both contracts fell for their third straight week with benchmarks dropping about 10% so far on a weekly basis.

"Oil resumed its decline after tanker transits through the Strait of Hormuz accelerated, following a brief rebound on Thursday when a container ship was struck by an unknown projectile off the coast of Oman," Saxo Bank analysts said.

"The mini tsunami of released barrels is weighing on the front end of the futures curve, while refined fuel markets remain tight. As a result, refinery margins stay elevated, delaying price relief for end users of diesel, jet fuel, and, not least, gasoline as the Northern Hemisphere driving season reaches its peak," they said.

Market bears largely shrugged off a fresh maritime security incident on Thursday when the Singapore-flagged container ship Ever Lovely was struck by an unknown projectile 7.5 miles off the coast of Oman.

While the UK Maritime Trade Operations report briefly renewed safety concerns and shook crew confidence, commercial vessels continued their transits through Friday.

The strike occurred just a day after Iran's Islamic Revolutionary Guard Corps issued a stern warning that any newly established transit routes in the Hormuz without Tehran's explicit coordination would be treated as "unacceptable and dangerous."

Despite the fragile security landscape, oil flows are showing strong signs of normalization.

Analysts at ANZ noted that regional heavyweight producers are actively ramping up export activities, highlighted by Qatar issuing its first crude sales tender since the conflict erupted, alongside a steady stream of Saudi Arabian-owned tankers navigating toward the major Ras Tanura export terminal.

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