Morning Highlights: Brent at $96 Heading for Biggest Weekly Loss Since June; Hormuz Traffic Below 10% of Normal, Saudi Capacity Cut 600,000 bpd

Friday, April 10, 2026 | 6:15 AM ET

Market Snapshot

Brent (June) $96.48 | WTI (May) $98.52 Brent +0.56%, WTI +0.66% on the day.

Both contracts down 11-12% on the week, biggest weekly decline since June 2025, following Tuesday's ceasefire announcement. Hormuz traffic below 10% of normal volumes; Saudi production capacity cut 600,000 bpd, East-West Pipeline throughput down 700,000 bpd from attacks; Iran seeking transit fees; Lebanon ceasefire talks lift sentiment marginally; Gulf producers asking Asian refiners to submit May loading programs.

Bottom Line

The futures market has priced a partial normalization that the physical market is flatly refusing to confirm. Ole Hansen at Saxo Bank put it precisely: the Strait of Hormuz remains effectively constrained and the global oil system is far from normal. Traffic below 10% of pre-war volumes is not a reopening, it is a trickle, and Iran asserting control by warning ships to stay within its territorial waters while simultaneously seeking to charge transit fees under any permanent deal tells you Tehran views the strait as leverage to be monetized, not a waterway to be freely returned. The Saudi production capacity news is the supply-side development that will outlast the ceasefire negotiation regardless of outcome. Attacks cutting 600,000 bpd of production capacity and 700,000 bpd of East-West Pipeline throughput means the infrastructure that has been doing the heavy lifting of alternative routing - Yanbu - is itself compromised. JPMorgan quantifying roughly 50 damaged Gulf infrastructure assets and 2.4 million bpd of refining capacity taken offline puts a number on the restoration challenge that no ceasefire agreement automatically resolves. Gulf producers asking Asian refiners to submit April and May loading programs is the most operationally constructive signal of the week - Aramco, KPC and SOMO are all preparing the commercial machinery for resumed exports - but every program is conditional on Hormuz transit actually becoming possible, and Aramco's Ras Tanura nominations are explicitly subject to strait reopening. The Lebanon ceasefire discussion, with Beirut agreeing to participate in Washington talks next week with U.S. and Israeli representatives, is the diplomatic development that moved prices off their Friday lows. Resolving the parallel Israel-Hezbollah conflict removes one of Iran's stated objections to proceeding with permanent peace talks, and if that track produces a genuine ceasefire it changes Iran's calculus on the main negotiation. The Ukraine peace signal from Budanov is worth noting as background context for the energy market even though it is a separate conflict. A Russia-Ukraine settlement would remove the Ukrainian attack pressure on Russian Baltic and Black Sea export infrastructure that has been disrupting the alternative supply Russia has been providing to a market desperately short of Gulf barrels. Reduced Ukrainian strike activity on Primorsk, Ust-Luga and Novorossiysk would restore Russian export reliability at a moment when every non-Gulf barrel matters. Heading into the weekend the two-week ceasefire clock is running with Hormuz still effectively closed, Saudi infrastructure damaged, Iran seeking to commoditize strait access, and the comprehensive peace negotiation that makes any of this permanent still in early stages. The 11-12% weekly decline reflects ceasefire optimism. The $96 floor reflects the market's honest assessment that optimism and physical reality remain far apart.

Top Developments

Hormuz Traffic Below 10% of Normal, Iran Seeks Transit Fees

Traffic through the Strait of Hormuz remained below 10% of pre-war volumes Friday as Iran continued warning ships to keep within its territorial waters and asserting control over passage. Iran has told Reuters it wants to charge fees for ships transiting the strait under any permanent peace deal -- a position Western governments and the UN's shipping agency have pushed back on directly. The IRGC's permission-based transit regime remains in effect despite the Tuesday ceasefire announcement, and the gap between the announced ceasefire and physical strait access has been the defining market dynamic of the week.

Saudi Production Capacity Cut 600,000 bpd, East-West Pipeline Down 700,000 bpd

Saudi state news agency SPA reported Thursday that attacks on Saudi energy facilities have reduced the kingdom's production capacity by approximately 600,000 bpd and cut East-West Pipeline throughput by roughly 700,000 bpd. The East-West Pipeline feeding Yanbu has been the primary alternative routing for Saudi crude since Hormuz closed, making throughput damage there directly consequential for the only functioning large-scale Saudi export outlet. JPMorgan estimated roughly 50 Gulf infrastructure assets have been damaged since February 28, with approximately 2.4 million bpd of regional refining capacity taken offline.

Gulf Producers Prepare May Loading Programs, Ras Tanura Conditional on Hormuz

Saudi Aramco asked customers to submit cargo nominations for both Yanbu and Ras Tanura loading in May, with Ras Tanura explicitly conditional on Hormuz reopening. Kuwait Petroleum Corp provided April loading dates for Kuwait Export Crude on an FOB basis, subject to customers' ability to lift cargoes. Iraq's SOMO asked customers to submit loading schedules following Iran's exemption of Iraqi crude from Hormuz restrictions. Indian, South Korean and Taiwanese refiners are actively seeking tankers to load Gulf crude. The commercial preparation is real and significant -- producers are ready to move barrels -- but every program remains contingent on physical strait access that does not yet exist at meaningful scale.

Lebanon Ceasefire Talks Lift Sentiment Marginally

Lebanon confirmed it will participate in Washington talks next week with U.S. and Israeli representatives to discuss a ceasefire in the parallel Israel-Hezbollah conflict. Iran has cited continued Israeli strikes on Lebanon as a reason it considers permanent peace talks unreasonable, meaning a Lebanon ceasefire resolution removes one of Tehran's stated objections to the main negotiation. Prices pared some gains Friday on the news, reflecting the market's recognition that resolving the Lebanon track could accelerate the broader diplomatic timeline.

Ukraine Peace Signal Adds Background Context

Ukraine's chief negotiator Kyrylo Budanov told Bloomberg he sees progress toward a Russia-Ukraine settlement and does not think resolution will take long, citing Russian financial exhaustion from war costs now running into the trillions. Two people close to the Kremlin offered a more cautious read, saying discussions remain largely stalled over security guarantees. A Russia-Ukraine settlement would reduce Ukrainian drone strike pressure on Russian Baltic and Black Sea oil export infrastructure -- Primorsk, Ust-Luga and Novorossiysk -- that has been repeatedly disrupted this month, restoring reliability to Russian supply that global markets have been treating as a critical alternative to unavailable Gulf barrels.