Oil Falls After Hormuz Improves
Oil prices weakened again on Wednesday (June 24th), as an increasing number of tankers began openly transiting the Strait of Hormuz. This indicates improving market confidence after the United States and Iran signaled progress in efforts to end the conflict.
Brent prices fell to near US$76 per barrel after previously weakening 1.1%. Meanwhile, West Texas Intermediate (WTI) fell below US$73 per barrel. Tankers have begun activating satellite signals while passing through the channel, indicating that ship owners perceive the security risk is decreasing.
Market sentiment was also supported by a statement from the International Maritime Organization that it had received assurances that hundreds of ships would be safe from leaving the Persian Gulf. This eased concerns about disruptions to global oil supplies, given that the Strait of Hormuz is one of the world's most important energy routes.
However, the peace process between Washington and Tehran is expected to remain a long road. While both sides have shown initial progress, several key issues remain unresolved, including administrative arrangements for the Strait of Hormuz, transit fees, and concerns that Iran could impose levies on ships passing through.
Pressure on oil prices also stems from expectations of increased global supply. The United States has temporarily permitted purchases of Iranian oil as part of the diplomatic process, while several Gulf producers have begun to restore exports. The United Arab Emirates has even returned to nearly 85% of pre-war production levels, while Kuwait and Iraq have also begun increasing production.
However, the market is not entirely free from risks. In the United States, industry data shows that oil inventories at the Cushing, Oklahoma, storage hub have fallen again by around 1 million barrels. If confirmed by official data, these stocks could fall below the 20 million barrel level, often considered the minimum operational limit. This means that while oil prices are under pressure from the improving situation in Hormuz, the potential for tight supplies in some regions still warrants vigilance. (Asd)
Source: Newsmaker.id
