Meanwhile, a top analyst says the Iran war proves that the oil glut was "a myth": File Image/Pixabay

As oil again closed above $100 on Friday, pundits hoped for some price relief stemming from the news that the U.S. is temporarily easing some sanctions on Russian oil shipments.

U.S. sanctions will not apply for 30 days on deliveries of Russian oil that’s been loaded on tankers as of Thursday, said Washington, due to supply shortages caused by Iran blocking the Strait of Hormuz.

Brent finished the week at $102.57 after earlier posting a high of $103.24 per barrel, and West Texas Intermediate closed at $98.79 per barrel.

About 125 million barrels of Russian oil was currently being shipped, the equivalent of six days of normal shipments through the Hormuz or one day’s worth of global consumption.

Simone Tagliapietra, an energy expert at the Bruegel, praised the initiative as a modest stopgap measure, stating, “The impact on prices should therefore be modestly downward, or at least stabilizing.”

Meanwhile, Friday saw reports that Iran allowed two Indian-flagged liquefied petroleum gas carriers sail through the Hormuz, a significant development if confirmed because it might herald a return to normal shipping flows.

Philip Jones-Lux, senior market analyst at Sparta Commodities, said of the Hormuz closure, “This is the most important oil supply disruption event since the 1970s,” and he added that the International Energy Agency’s unprecedented decision earlier this week to release 400 million barrels into the market will help keep prices from going to “stratospheric levels” - but only for a short period.

As for oil trading strategies, Rebecca Babin, a senior energy trader at CIBC Private Wealth Group, said that “Many traders appear to be positioning themselves defensively rather than risk becoming casualties of the next headline…Even though the downside is likely smaller than it was at the start of the year, it would still represent a meaningful move lower if some form of an off-ramp emerges.”

In other oil news on Friday, China’s state-controlled Sinopec will reportedly slash its refinery processing rates this month by 11-13 percent amid stalled crude supply in the Middle East.

Sinopec plans to lower its crude runs by between 600,000 and 700,000 barrels per day (bpd) in March, from initial plans to process 5.2 million bpd; the loss in throughput does not include regular refinery maintenance planned or started before the war, according to  sources.

Also on Friday, Cyril Widdershoven, a senior maritime, energy, and geopolitical analyst at Blue Water Strategy, wrote in Oilprice.com that “The continuing war around Iran and the unexpected closure of the Strait of Hormuz..made clear with a big bang what may be the most important misconception in modern energy analysis: let's challenge it all by stating the oil glut has never existed.

“The myth of the oil glut is over. The world realizes again that oil markets are fragile systems balanced on narrow margins. When margins disappear, the consequences will reshape the global economy.”