Oil prices dipped on Friday as investors weighed signals that Gulf states and Iran were closing in on a deal to reopen the Strait of Hormuz under a temporary arrangement aimed at allowing for broader talks to bring the Iran war to a close.
Brent crude futures fell 0.9% to $81.74 per barrel, while West Texas Intermediate crude futures fell 0.7% to $76.74/bbl. However, both the benchmarks were headed for second straight weekly losses of more than 9% each on a weekly basis.
Reuters reported that a senior Iranian official stated Tehran is seeking fees of 5% to 7% of cargo value for ships using the strait, while Oman is discussing a 3% fee, and Washington continues to push for zero fees.
The geopolitical gridlock was intensified by reports from Iranian state media regarding strikes on hostile targets in the strait, alongside Houthi claims of a large-scale attack against Yemen's Saudi-backed government forces.
Despite these acute risks, ING maintained its forecast that flows will begin to normalize through the third quarter, projecting Brent will average $80/bbl for the period, though noting substantial ongoing uncertainty.
Saudi Arabia slashed its official selling prices for almost all crude grades for September loading. Arab Light destined for Asian buyers was reduced by $0.50/bbl to a $2/bbl discount against the benchmark.
ING analysts noted that the price cuts are a direct response to pressure from Asian buyers navigating longer, costlier shipping routes around Africa to safely bypass ongoing hazards in the Red Sea.