Oil Prices Remain Unchanged Amid Tanker Traffic in Strait of Hormuz

Oil Prices End Little Changed Amid Ongoing Iran War Tensions

New York, May 14 (Reuters) - Oil prices remained relatively unchanged on Thursday as Iran's state media reported that about 30 vessels had crossed the Strait of Hormuz, though ongoing attacks on ships and the seizure of others continued to fuel concerns over the flow of energy supplies during the Iran war.

Global benchmark Brent crude oil futures settled up 9 cents, or 0.09%, at $105.72 a barrel, while U.S. West Texas Intermediate futures settled at $101.17, up 15 cents or 0.15%. This comes after Brent crude futures lost more than $2 a barrel and WTI futures dropped more than $1 on Wednesday as investors worried about possible U.S. interest rate hikes to combat inflation.

The situation is further complicated by the fact that the Strait of Hormuz has been largely shut since the Iran war broke out at the end of February. Iran's Revolutionary Guards said 30 vessels had crossed the strait since Wednesday evening, which is still far short of the typical daily total of 140 before the war. Tehran has also tightened control over the strait, cutting deals with Iraq and Pakistan to ship oil and liquefied natural gas from the region.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

However, there have been some positive developments. Iran's semi-official Fars news agency cited a source saying Iran had begun allowing transit for some Chinese vessels. Before the Fars report, a Chinese supertanker carrying 2 million barrels of Iraqi crude sailed through the strait on Wednesday after being stranded in the Gulf for more than two months. A Panama-flagged crude oil tanker managed by Japanese refining group Eneos has also passed through the strait, ship-tracking data from LSEG showed on Thursday, the second instance of a Japan-linked oil ship making it through.

Despite these developments, the situation remains volatile. An Indian cargo vessel carrying livestock from Africa to the United Arab Emirates was sunk on Thursday off the coast of Oman, and British maritime security agency UKMTO reported that "unauthorised personnel" had boarded a ship anchored off the United Arab Emirates port of Fujairah, and were steering it toward Iran.

The ongoing tensions are having a significant impact on the global economy. The International Monetary Fund said the global economy is moving into a middle "adverse scenario," which would see global real GDP growth falling to 2.5% this year from 3.4% growth in 2025. Global oil supply will fall short of total demand this year as inventories are drained at an unprecedented pace, the International Energy Agency said on Wednesday.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

The White House has been scrambling to contain the economic and political fallout of the war with Iran. In a meeting with Chinese President Xi Jinping, U.S. President Donald Trump and Xi agreed that the Strait of Hormuz must be open for the free flow of energy. Xi expressed interest in purchasing more U.S. oil to reduce China's dependence on the Strait of Hormuz, a move that could potentially alleviate some of the pressure on the global oil market.