Oil Prices Near New Low as Tanker Traffic Improves Through Hormuz

SadaNews - Oil prices continued their decline as more tankers openly crossed the Strait of Hormuz, while the United States and Iran indicated progress toward ending the war.

Brent crude fell below $77 per barrel after a 1.1% decline in the previous session, while West Texas Intermediate was around $73.

Ships are traversing the waterway with their signals activated via satellite, indicating increasing confidence among shipowners. The International Maritime Organization also reported receiving safety guarantees that allow hundreds of ships to exit the waters of the Arabian Gulf.

Washington and Tehran hinted at early progress in talks to end the war that began in late February, although negotiations are expected to be prolonged, amid differing claims from both sides. Iran and Oman stated they have begun working on an agreement to manage Hormuz, including services provided to ships and associated costs, while concerns remain that Tehran may impose fees.

Oil Approaches New Bottom

Carl Larry, a senior oil and gas analyst at Enverus, stated: "I think the market has been waiting for last remaining bullish speculators to give up, and we are nearing a bottom around $75." He added, "There are many upcoming questions: supply replacement, loading wait times, and China's return as a buyer."

The Republican-led Senate voted on Tuesday to end the U.S. war with Iran in a rare symbolic rebuke of President Donald Trump. Although the resolution is unlikely to impose any changes to the administration's strategy, it represents the latest signal that the president lacks domestic support for this effort.

Futures contracts for oil are down more than a third from their peak levels during the war, driven in part by expectations of an impending increase in crude supplies. The U.S. has temporarily allowed the purchase of Iranian oil as part of the diplomatic process, aiding sellers' efforts to sway major Asian refiners.

Concurrently, Gulf producers, including the UAE, are swiftly working to restore exports. UAE oil exports have recovered to nearly 85% of pre-war production levels, according to the International Energy Agency, highlighting the region's ability to increase supplies once again. Kuwait has rolled back declarations of force majeure, while Iraq is also boosting production.

Nonetheless, there are signs of tightness in some markets, including the United States. The American Petroleum Institute reported that crude stocks at the primary storage hub in Cushing, Oklahoma, fell by another million barrels last week, according to a document seen by Bloomberg.

If official data confirms this later on Wednesday, it would mean that inventories have dropped below the 20 million barrels level, widely viewed as the minimum operational threshold.