MUFG: Oil - FJElite

Oil heads for strong weekly gain as US intensifies pressure on Iran. Brent held near USD 100/b, and WTI approaching USD 93/b, as traders weighed renewed US- Iran tensions against a potential agreement between Iran and Oman to manage shipping through the Strait of Hormuz. Iran said a deal including a temporary safe passage was imminent, although uncertainty remains over a potential US response and Iran has warned vessels of continued risks if passing near Oman. Despite security concerns, around 10mb/d of oil is still flowing through Hormuz, according to Vitol, helping prevent a more severe supply squeeze. Meanwhile, Saudi Aramco's Jazan facilities also faced another attack, although no major new damage was reported. With Brent already more than 30% higher since the conflict began, the proposed Hormuz arrangement could ease some supply concerns, but persistent tanker and infrastructure attacks are likely to keep crude and refined-product markets tight.