Oil prices extended their losses on Wednesday, trading near four-month lows as signs emerged that more stranded tankers in the Gulf are set to move out of the Strait of Hormuz following the US-Iran ceasefire agreement. Brent crude futures dropped 37 cents, or 0.5%, to $76.71 a barrel, while US West Texas Intermediate slipped 36 cents, or 0.5%, to $72.85 a barrel. Both benchmarks declined nearly 1% on Tuesday, touching their lowest levels since early March.
Pressure from Easing Geopolitical Tensions
Prices have come under pressure this week after Washington granted Tehran a 60-day sanctions waiver following initial peace talks, allowing Iran to sell oil. Additionally, hostilities in Lebanon have eased. "Crude oil prices were weighed down by hopes of easing US-Iran tensions and a recovery in oil shipments through the Strait of Hormuz," said Tomomichi Akita, senior economist at Mitsubishi UFJ Research and Consulting. "Further progress in nuclear negotiations could push prices back to pre-war levels," he added.
Strait of Hormuz Navigation Talks Progress
On Tuesday, Oman and Iran agreed to press on with discussions about the future administration of navigation in the Strait of Hormuz. US Secretary of State Marco Rubio stated that any Iranian attempt to levy transit fees would violate international law. However, uncertainty remains over the durability of the accord. US President Donald Trump said on Tuesday that Iran had agreed to nuclear inspections "into infinity," while Tehran claimed it had made no such concession in negotiations.
Shipments and Inventory Data
Investors are closely 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 UN 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 US-Iran ceasefire deal.
Meanwhile, crude stocks fell by 765,000 barrels in the week ended June 19, according to market sources 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.
