Oil climbs as strikes on Saudi facilities stoke anxiety, Hormuz near standstill
Prices were still headed for a loss as nerves eased over a fragile two-week ceasefire between the US and Iran, while Israel signalled a potential diplomatic opening, saying it was ready to begin direct talks with Lebanon as soon as possible.
Oil prices climbed today (10 April), driven by fresh anxiety over supplies from Saudi Arabia and as tanker traffic through the critical Strait of Hormuz remained largely frozen.
Prices were still headed for a loss as nerves eased over a fragile two-week ceasefire between the US and Iran, while Israel signalled a potential diplomatic opening, saying it was ready to begin direct talks with Lebanon as soon as possible.
Brent crude futures added 58 cents, or 0.60%, to $96.50 a barrel as of 0338 GMT. West Texas Intermediate futures were up 49 cents, 0.50%, at $98.36 a barrel.
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For this week, both contracts have so far lost 11%, the biggest weekly decline since June 2025.
Attacks on Saudi energy facilities have cut the kingdom's oil production capacity by around 600,000 barrels per day and throughput on its East-West Pipeline by about 700,000 bpd, Saudi state news agency SPA reported yesterday (9 April), citing an official source at the Ministry of Energy.
Concerns of further oil supply disruptions were heightened after the report, ANZ analysts said in a note today.
"The initial wave of relief following President Trump's two-week ceasefire announcement has quickly given way to underlying doubts," IG market analyst Tony Sycamore said in a note.
"All eyes remain firmly on tanker tracker flows through the Strait of Hormuz for any signs of increased activity ahead of peace talks scheduled in Pakistan today," Sycamore said.
Ship traffic through the strait stood at well below 10% of normal volumes yesterday, despite the ceasefire, as Tehran asserted its control by warning ships to keep to its territorial waters while doing so.
Iran and the US agreed Tuesday (7 April) to a two-week ceasefire brokered by Pakistan, but fighting was still taking place following the announcement.
Analysts say Pakistan will try to push for a more durable peace agreement but may lack the leverage needed to compel the reopening of the strategic waterway.
Iran wants to charge fees for ships passing through the strait under a peace deal, a Tehran official told Reuters on 7 April. Western leaders and the UN's shipping agency have pushed back on the idea.
The crucial artery for oil and gas flows has been effectively shut down by the conflict, which began on 28 February when the US and Israel launched air strikes on Iran.
Brent prices could reach $190 a barrel if flows through the Strait of Hormuz remain at the current level, said John Paisie, president of energy consultants Stratas Advisors.
"If Iran allows increasing flows, the price of oil will be more moderate, but still well above pre-war levels."
Some 50 infrastructure assets in the Gulf have been damaged by drone and missile strikes over the nearly six weeks since the conflict started, and around 2.4 million bpd of oil refining capacity have been taken offline, according to JPMorgan.
