In FY24-25, the royalty collected from the oil and gas fields in Sindh was around Rs60 billion. PHOTO: FILE
Oil prices fell on Friday as markets weighed the possibility of a truce between the US and Iran against concerns that increasing attacks against Saudi Arabia by Houthi fighters could disrupt supply from the key Middle Eastern producer.
Brent was down 40 cents, or 0.4%, at $106.20 a barrel, while West Texas Intermediate (WTI) was $1.02, or 1.1% lower at $93.59 a barrel.
For the week, Brent so far has gained 2.2% and WTI has dropped 6.8%.
US and Iranian negotiators in New York are exploring a phased path out of war that would involve Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade of Iran, sources close to the talks said this week.
On Thursday, Iranian President Masoud Pezeshkian said it was up to the US to choose when the Iran war will end.
“At this point, neither Iran nor the US has an interest in a more intense, less controllable war,” SEB Research’s Erik Meyersson said in a note. “The next couple of days could represent a watershed moment in the Iran War.”
Since the war began at the end of February, around a fifth of the world’s oil and gas shipments have been curtailed.
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“Diplomatic hopes are essentially helping oil prices weather the latest military strikes in the Middle East, with crude trading moderately softer despite the attacks,” said Tim Waterer, chief analyst at KCM Trade.
On Thursday, oil prices touched a one-week high, with both contracts rising as much as 5%.
The spread between Brent and WTI is the widest it has been since May at $12.59 a barrel.
Fears of a US ban on diesel exports that could flood the domestic market are largely responsible for the price bifurcation, given that the two benchmarks usually rise and fall in tandem, despite the US contract usually selling at a discount.
“The widening Brent-WTI spread reflects a growing divergence between global supply risks and US market fundamentals,” said Sugandha Sachdeva, founder of SS WealthStreet, a New Delhi-based research firm.
Brent is carrying a substantial geopolitical risk premium as Gulf supplies remain constrained, while higher US production and inventories are keeping WTI at a substantial discount to Brent, Sachdeva said.
Saudi Arabia intercepted six ballistic missiles fired by Yemen’s Iran-backed Houthis, thwarting attacks on the southern province of Taif and the Yanbu area on the Red Sea, the Saudi-led coalition in Yemen said.
Saudi Arabia is building up crude pumping volumes through its East-West Pipeline that runs to its Red Sea export hub of Yanbu, although crude tanker loadings have yet to resume, according to industry sources, satellite imagery and shipping data.
