Oil edges lower amid resumption of strait shipments even as vessel hit near Oman

Oil prices edged lower on Friday morning, poised for substantial weekly losses as easing supply concerns counteracted geopolitical tensions. The market is watching closely after a cargo vessel was struck by an unknown projectile near Oman on Thursday, an incident that briefly sent benchmark crude contracts up more than 2 percent.

U.S. officials attributed the attack on the cargo ship to Iran as it attempted to transit the Strait of Hormuz. Iranian authorities, however, stated that the security of vessels passing outside designated routes is not guaranteed. This event reintroduced geopolitical risk premiums into the market, prompting analysts to monitor whether tanker traffic would resume or if further incidents would curb planned production increases.

Despite the near-miss incident, data indicated that crude shipments through the Strait of Hormuz rose this week to their highest level since February, following a ceasefire deal that reopened the waterway. However, overall traffic remains a fraction of the daily average of 125 ships that passed through before the conflict began. Both Brent crude and U.S. West Texas Intermediate benchmarks are set for losses of approximately 7 percent this week.

Additional supply concerns emerged from earthquakes in Venezuela on Thursday. Preliminary assessments suggest limited damage to the country's oil, gas, and refining infrastructure, as major production regions and facilities are located away from the hardest-hit areas. Nevertheless, power outages have cast doubt on the sustainability of oil output at its pre-earthquake level of around 1.2 million barrels per day.

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With the geopolitical risk premium once again creeping back into prices, markets will be watching intently to see if tanker traffic resumes or if these latest hurdles force producers to tap the brakes on planned production increases.