WASHINGTON (dpa-AFX) - Giving back ground after soaring in recent sessions, crude oil prices have tumbled on Friday amid expectations of a possible reopening of the Strait of Hormuz after reports indicated a possible meeting between Iran and the members of the Gulf Cooperation Council in the coming week to defuse the gulf crisis.
In addition, traders resorted to booking profits from the more-than-10% gains made from this week's trading sessions.
WTI Crude Oil for October delivery was last seen trading down by $2.63 (or 2.57%) at $99.85 per barrel.
Heading to Texas yesterday for the first mid-term election convention, U.S. President Donald Trump claimed that the U.S.-Iran war will end immediately after the midterm elections in November.
Trump also asserted that crude oil prices would tumble after that and gasoline prices in the U.S. would fall.
Trump observed that talks with Iran could happen but he stressed that the U.S. was not very keen on having any dialogue with Iran.
Both nations have engaged in a fresh exchange of attacks over the past 10 days after a brief period of pausing military maneuvers against each other's targets.
Amid this standoff, the Strait of Hormuz continues to be effectively shut for shipping traffic.
Citing Friday's data from ship-tracking agency, Kpler, Reuters reported that vessel transits through the Strait of Hormuz fell to seven on Thursday from 11 of the previous day, well below the 10-day average of 15. Of the seven vessels, five entered the seaway while two exited.
Yesterday, through the Bab el-Mandeb strait, 26 commodity vessels travelled, and out of these 26, 10 vessels entered and 16 exited.
Compounding the gulf crisis over recent days, the Iran-supported Houthi militant group of Yemen carried out a series of missile and drone attacks on south-western Saudi Arabia, causing extensive damage at several Saudi oil facilities.
The Houthi militants captured the port city of Mocha, increasing concerns that the group might shut the Bab al-Mandeb Strait, giving more leverage to Iran.
Citing two officials, Axios reported that Saudi Crown Prince Mohammed bin Salman called Trump twice yesterday and urged him to launch strikes against the Houthis. Trump reportedly declined the request to avoid direct intervention as of now.
However, the Commander of U.S. Central Command Admiral Brad Cooper traveled to Saudi Arabia yesterday for urgent coordination meetings.
Crude oil prices skyrocketed over the past few days due to increasing supply disruption concerns.
Meanwhile, citing sources, the Financial Times reported that the six-member Gulf Cooperation Council is scheduled to meet Iranian officials in the coming week with an aim to discuss ways to defuse the crisis and push Iran to reopen the Strait of Hormuz.
Oman, which began this initiative, is planning to have the foreign ministers of the GCC and Iran to meet at the southern Omani city of Salalah on Monday. Neither Oman nor Iran has officially confirmed this development.
With the U.S. not showing interest for talks with Iran, Iran hardening its stance on control over the Strait of Hormuz, and the recent escalation between the Houthis and Saudi Arabia, the GCC member-nations along with Oman are seeking ways to end the ongoing U.S.-Iran war at the earliest.
Meanwhile, the International Energy Agency slashed its outlook for global oil demand, expecting consumption to decline by 2,500,000 barrels per day in the current year to 102,400,000 bpd. The Paris-based energy watchdog had earlier forecasted a 1,600,000 decline.
Supply in 2026 is now predicted to decline by 5,700,000 million bpd, or about 6%.
However, the Organization of Petroleum Exporting Countries estimated a rise in demand by 380,000 bpd in 2026.
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