ISLAMABAD: Crude oil prices went slightly down on Friday but were on track to end the week higher amid continued Middle East tension and potential disruption to oil supplies from the region. As of 1215 hours GMT, Brent, the international benchmark for two-thirds of the world’s oil, shed $0.04 (-0.05 percent) to reach $79.06 a barrel. Similarly, the West Texas Intermediate (WTI), the main oil benchmark for North America, went down by $0.05 (-0.07 percent) to $74.03 a barrel. Brent ended last week lower by 0.60 percent, falling to $78.29 a barrel from $78.76 a barrel on a week-on-week, while WTI closed last week down to $72.68 from $73.81 a barrel, registering a weekly decline of 1.53 percent. Both benchmarks shed more than 10 percent in 2023 on a year-on-year basis. On the other hand, the price of Russian Sokol increased by $0.69 (+0.96 percent) to $72.37. TLTP
Arab Light prices witnessed an increase of $0.78 (+0.99 percent) to reach $79.38 a barrel. However, the price for Opec Basket decreased to $78.38 a barrel with a dip of $0.78 (-0.99 percent). The OPEC Reference Basket of Crudes (ORB) is made up of Saharan Blend, Girassol, Djeno, Zafiro, Rabi Light, Iran Heavy, Basra Light, Kuwait Export, Es Sider, Bonny Light, Arab Light, Murban and Merey.
Geopolitical tension in the Middle East is continuing to rise amid the Israel-Gaza conflict, stoking fears that it could engulf the entire region and disrupt oil supplies from the Middle East. Yemen’s Houthi militants, who say they are acting in solidarity with Palestinians, intensified attacks on ships passing through the Red Sea, a key waterway connecting Asia and Europe.
Bab El Mandeb, on the southern edge of the Red Sea, is a route for oil tankers and cargo ships sailing between the Arabian Gulf and Asia, as well as to Europe through the Suez Canal. About 12 percent of the world’s seaborne oil trade and 8 percent of liquefied natural gas pass through the strait.
Many shipping companies have suspended their operations along the Red Sea and are forced to travel through the longer Cape of Good Hope route at the southern tip of Africa to transport goods to Europe and other destinations amid Houthi attacks.
Bullish demand forecasts by Opec have also been supporting oil prices. Global oil demand growth is expected to record “robust” annual growth of 1.8 million barrels per day in 2025, Opec said in its monthly report on Wednesday. Demand in Organisation for Economic Cooperation and Development member countries is expected to grow by 0.1 million bpd, while demand in the non-OECD states is forecast to increase by 1.7 million bpd, according to the Opec report.
