Oil prices fell further on Wednesday, extending this week’s losses and trading near four-month lows as more oil tankers resumed movement through the Strait of Hormuz. The improving shipping situation boosted market expectations of stronger crude supplies.
Brent crude futures declined 78 cents, or 1.0%, to $76.30 per barrel by 0350 GMT. Meanwhile, U.S. West Texas Intermediate crude dropped 78 cents, or 1.1%, to $72.43 per barrel.
Both benchmarks had already settled about 1% lower on Tuesday, reaching their weakest levels since early March. Consequently, investors continued to monitor developments affecting global oil flows.
ING commodity strategists said improving conditions in the Persian Gulf were supporting optimism over shipping activity through the Strait of Hormuz. Although vessel crossings have increased in recent days, they noted that traffic remains below pre-conflict levels.
Oil prices also faced pressure after Washington granted Tehran a 60-day sanctions waiver following initial peace talks, allowing Iran to continue oil exports. Additionally, easing hostilities in Lebanon further reduced concerns over regional supply disruptions.
Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting, said hopes for easing U.S.-Iran tensions and recovering oil shipments weighed on crude prices. He added that further progress in nuclear negotiations could return prices to pre-conflict levels.
Meanwhile, Oman and Iran agreed to continue discussions on the future administration of navigation through the Strait of Hormuz. However, U.S. Secretary of State Marco Rubio maintained that any attempt by Iran to impose transit fees would violate international law.
Despite improving sentiment, uncertainty remains over the durability of the diplomatic agreement. President Donald Trump claimed Iran accepted unlimited nuclear inspections, while Tehran denied making such a commitment.
Meanwhile, three stranded supertankers passed through the strait on Tuesday. The United Nations shipping agency also confirmed that an evacuation plan is underway to help hundreds of stranded vessels resume transit through the strategic waterway.
