Donna Dong
Research Analyst, Flux
Brent Falls to $96.90/bbl
Yanbu flows hold post-attack; Hormuz traffic <10%, China tests transit, Japan may tap reserves, tensions keep supply risk elevated.
The Jun’26 Brent futures contract climbed from $97.66/bbl at 13:00 BST to $99.48/bbl at 16:10 BST, before falling to $96.90/bbl as of the time of writing at 16:50 BST.
In the news, crude loadings at Saudi Arabia's Red Sea port of Yanbu have persisted despite an Iranian attack targeting the country's East/West Pipeline. Flows through the pipeline were anticipated to be impacted, and damage assessments are ongoing. Elsewhere, ship traffic through the Strait of Hormuz was significantly below 10% of usual levels on 09 Apr, despite the US-Iran ceasefire, as Tehran reaffirmed its control by warning ships to stay within its territorial waters. 2 Chinese oil tankers carrying Iraqi and Saudi crude oil accelerated this morning toward the exit of the Strait of Hormuz before stopping just at the entrance to the chokepoint. This suggests that Chinese vessel owners may be testing the conditions of the supposed resumption of transits. The Cospearl Lake crude oil tanker, associated with the Chinese state shipping company Cosco, left Basrah in Iraq in early March and has been broadcasting that it is Chinese-owned with a Chinese crew. Another China-owned tanker, He Rong Hai, left Ras Tanura in Saudi Arabia on 13 March after loading 2 mb of Saudi crude. He Rong Hai is also broadcasting its Chinese ownership and crew, and like the Cospearl Lake, it was positioned at anchor at the eastbound entrance of the Strait of Hormuz on 09 Apr’s morning. In other news, Japan is considering releasing another batch of oil stocks from reserves in May to cover about 20 days of consumption, amid ongoing uncertainty regarding tanker transits through the Strait of Hormuz. In Israel, Prime Minister Netanyahu has "instructed [his] cabinet ... to open direct negotiations with Lebanon." Finally, at the time of writing, the front-month (Jun/Jul) and 6-month (Jun/Dec) Brent futures spreads are at $5.76/bbl and $17.19/bbl, respectively.
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