Oil extended its decline despite rising Red Sea risk as a temporary easing of
U.S.-Iran hostilities and diplomatic efforts weighed on risk premia. Iran and
Oman are reportedly seeking an agreement to reopen the Strait of Hormuz. The
Caspian Pipeline Consortium terminal resumed loading after a one-week
suspension, adding downward pressure. Saudi Arabia said it intercepted drones
launched by Iran-backed Iraqi militias against oil facilities. Goldman Sachs
data show Persian Gulf crude flows have fallen to 41% of pre-war levels; Red Sea
flows fell by more than 3.0 mln b/d last week as Saudi shipments were rerouted
via the Suez Canal and Russia sharply reduced Red Sea exports. Despite the
selloff, supply risk remains elevated.
