News
Oil Nears Pre-War Levels as Tankers Exit Hormuz
Crude prices slipped further after stranded tankers began leaving the Strait of Hormuz, reducing fears of supply disruptions following a tentative ceasefire in the Middle East.
Key Highlights
- Oil price eased as supply concerns allayed after the Strait of Hormuz’s reopening
- Within the last 24h, over 20 million barrels of oil have passed through the strait
- Brent crude fell to $73.34 and WTI declined to $70.07 a barrel
The oil prices fell on Thursday reaching the pre-war levels after multiple tankers left the Strait of Hormuz easing the global supply.
August Brent crude futures were down 40 cents, or 0.54%, at $73.34 a barrel and U.S. West Texas Intermediate (WTI) crude fell 27 cents, or 0.38%, to pick up trade at $70.07 per barrel.
Supply Concerns Ease
WTI and Brent lost nearly $3 on Wednesday as traders responded to more constructive supply.
U.S. Energy Secretary Chris Wright said that over the last 24 hours, more than 20 million barrels of oil passed through the Strait of Hormuz as shipping volumes neared pre-war levels. However, it could still be a number of weeks before things return to normal because the waterway would have to be demined first, he added.
Last week, the original agreement closed the U.S.-Israeli declared war with Iran that started on Feb. 28 and permitted commercial shipping once again in the Strait of Hormuz.
The agreement also set up a new 60-day period of negotiations on wider issues affecting Iran, including the broader issue of its nuclear programme.
Tanker Traffic Resumes
Even if the deal did not take place, oil exports would be passing through Hormuz, Wright said, and Iran was unlikely to be able to shut another blockade down.
They created temporary shipping lanes to help the vessels get out of the strait, while port authorities and the International Maritime Organisation (IMO) have been coordinating vessel movements in Oman.
At the same time, Qatarís PM visited Oman to negotiate with Iran, Iraq and other Gulf countries about future arbitration for Strait of Hormuz negotiations.
The U.S. Energy Information Administration also announced that the nation reached a low in domestic crude oil inventories since 1984, last week, as high refinery demand increased and due to releases from the country's emergency oil reserve. Though inventories fell, the markets were unfazed by supply flows through the Strait of Hormuz as per EIA data.
Source: Reuters
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