Oil Heads for Record Sixth Weekly Loss as Iran Tensions Simmer in the Strait of Hormuz

Oil prices are on course for a historic sixth consecutive weekly decline, even as geopolitical flashpoints continue to flare in the Middle East. Brent crude was trading approximately 4 percent lower at $72.02 per barrel, while West Texas Intermediate fell 3.6 percent to $69.34 per barrel. A drone attack attributed to Iran on a cargo ship near Oman in the Strait of Hormuz did little to reverse the downward price trend. Analysts appear broadly confident that ongoing peace negotiations between Washington and Tehran will eventually produce a deal. Allen Good, director of equity research at Morningstar, said the market continues to look through these flare-ups as it perceives Trump and the Iranians as ultimately committed to a near-term deal and the opening of the strait. However, Scott Nations, president of Nations Indexes, pushed back on the prevailing market calm, saying nothing really has been resolved and that Iran knows they have the world economy where they want it if they want to shut down the strait. Iran’s foreign ministry reiterated that safe passage through the Strait of Hormuz is not guaranteed for vessels that do not first seek authorization from Tehran. Iraq has also reportedly warned OPEC it would leave the cartel unless granted a higher production quota, adding another layer of uncertainty to an already complex situation.