Oil prices rose more than 3% on March 26, rebounding on concerns it could take weeks to dislodge a giant container ship blocking the Suez Canal, which would squeeze supplies of crude and refined products.

Prices, however, were still headed for a third consecutive weekly loss, with the outlook for demand dented by fresh coronavirus lockdowns in Europe.

Brent crude was up $2.12, or 3.4%, to $64.07/bbl at 13:38 GMT, after dropping 3.8% on March 25. WTI crude in the U.S. was up $2.16, or 3.7%, at $60.72/bbl, having tumbled 4.3% a day earlier.

Both benchmarks were on track for weekly losses, following a more than 6% decline last week.

Egypt’s Suez Canal Authority said on March 26 operations to free the stranded container ship would resume after completing dredging operations, which are 87% complete.

The salvage company said on March 25 dislodging the ship could take weeks.

Of the 39.2 million bbl/d of total seaborne crude in 2020, 1.74 million bbl/d went through the Suez Canal, according to data intelligence firm Kpler. Additionally, 1.54 million bbl/d of refined oil products flow through the canal, about 9% of global seaborne oil product trade, Kpler said.

On March 26, there were ten vessels waiting at the entry points of the Canal carrying around 10 million barrels of oil, Kpler said.

Reeling from the blockage in the Suez Canal, shipping rates for oil product tankers have nearly doubled this week, and several vessels were diverted.

The oil markets were also lifted by worries over escalating geopolitical risk in the Middle East. Yemen's Houthi forces on Friday said they launched attacks on facilities owned by Saudi Aramco.

Expectations that OPEC and its allies will likely maintain their lower production also supported prices.

Big oil importer India said Saudi Arabia telling it to tap its oil stockpiles to tackle high prices was “undiplomatic.”

Acting a week ahead of the OPEC+ meeting, Abu Dhabi National Oil Co. (ADNOC) has deepened crude oil supply cuts to Asian customers in June to 10%-15% from 5%-15% in May, several sources said.