Oil records its largest weekly loss since 2022

Oil futures prices fell in Friday trading, recording their largest weekly decline since 2022, ahead of talks between Iran and the United States aimed at reaching a permanent ceasefire.

Crude futures hovered near $100 per barrel, with continued attacks and restrictions on the flow of oil through the Strait of Hormuz, and continued concerns about possible supply disruptions.

Brent crude futures fell 72 cents, or 0.8%, at settlement to settle at $95.20 per barrel, concluding a week in which contracts witnessed a decline of 12.7%.

The decline came after a sharp selling wave after Iran and the United States agreed on Tuesday to a two-week ceasefire mediated by Pakistan.

This was the biggest weekly decline for Brent since August 2022.

US West Texas Intermediate crude futures fell by $1.30, equivalent to 1.3%, upon settlement at $96.57 per barrel, recording a weekly decline of 13.4%, the largest since April 2020 during the closure period due to the Corona pandemic.

On Tuesday, Iran and America agreed to a two-week ceasefire, but hostilities continued after the announcement.

Analysts say Pakistan will try to push in the talks for a more sustainable peace deal but may lack the influence necessary to push Iran to reopen the strategic Strait of Hormuz.

An official in Tehran told Reuters on April 7 that Iran wants to impose fees on ships passing through the strait under any peace agreement. Western leaders and the International Maritime Organization rejected this proposal.

The conflict has effectively closed this vital corridor for oil and gas flows since February 28, when the United States and Israel launched air strikes on Iran.

John Pacey, president of energy consulting firm Stratas Advisors, said that Brent crude prices could reach $190 per barrel if flows through the Strait of Hormuz remain at the current level.

He added: “If Iran allows increased flows, the price of oil will be more moderate but will remain much higher than pre-war levels.”

JP Morgan says that about 50 infrastructure facilities in the Gulf have been damaged by drone and missile attacks over a period of approximately six weeks since the start of the conflict, and about 2.4 million barrels per day of oil refining capacity has been disrupted.