Oil prices extend decline on expectations of smoother crude flows via Hormuz
Prices have come under pressure this week after Washington granted Tehran a 60-day sanctions waiver following initial peace talks, allowing it to sell oil, and as hostilities in Lebanon eased.
"Crude oil prices were weighed down by hopes of easing U.S.-Iran tensions and a recovery in oil shipments through the Strait of Hormuz," said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting.
"Further progress in nuclear negotiations could push prices back to pre-war levels," he added.
Still, uncertainty remains over the durability of the accord. U.S. President Donald Trump said on Tuesday that Iran had agreed to nuclear inspections into "infinity," while Tehran said it had made no such concession in negotiations.
Investors are also watching how quickly Middle Eastern producers can restore exports and whether more ships will enter the region.
An Iranian military source told Fars news agency that a limited number of vessels are being allowed to pass through the strait each day under coordination with Iran's Revolutionary Guards Navy.
Ship-tracking data showed that three stranded supertankers passed through the strait on Tuesday. The U.N. shipping agency said an evacuation plan to enable hundreds of ships with 11,000 seafarers stranded in the Gulf to sail through the strait is underway after the U.S.-Iran ceasefire deal.
Meanwhile, crude stocks fell by 765,000 barrels in the week ended June 19, market sources said, citing data from the American Petroleum Institute released on Tuesday. Nine analysts polled by Reuters estimated, on average, that crude inventories fell by about 4.5 million barrels in the last week.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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