Key facts
- Oil prices rose as investors awaited clearer signs of progress in restoring crude flows through the Strait of Hormuz.
- Several sulphur vessels have transited the Strait of Hormuz since the US-Iran peace deal.
- Two crude tankers carrying nearly 2 million barrels of oil sailed through the Strait of Hormuz on Monday.
- Commercial shipping through the Strait of Hormuz remains below pre-war levels.
- US crude stocks in the Strategic Petroleum Reserve fell to their lowest level since June 1983.
Oil prices saw a rebound after a significant drop, influenced by cautious optimism surrounding U.S.-Iran peace talks and the potential normalization of crude flows through the Strait of Hormuz. Brent crude futures rose 0.38% to $78.15 a barrel, and U.S. West Texas Intermediate increased by 0.46% to $74.19 a barrel as of 0026 GMT. The previous day saw prices fall over 3% following the U.S. granting Iran a 60-day sanctions waiver and reports of a lull in hostilities. This development followed a weekend where the accord faced uncertainty, including threats from U.S. President Donald Trump regarding shipping disruptions.
Market sentiment remains skeptical due to deep-seated mistrust between Washington and Tehran, suggesting a delayed return to pre-war oil prices. Trump indicated that Iran would agree to weapons inspections and stated he would take necessary action if Iran failed to adhere to the agreement. Traders are adopting a more measured approach, awaiting concrete evidence of the deal's stability and the normalization of traffic.
On Monday, two crude tankers carrying nearly 2 million barrels of oil transited the Strait of Hormuz, signaling an increase in traffic after weaker flows on Sunday. Separately, U.S. crude stocks in the Strategic Petroleum Reserve decreased to 331.2 million barrels last week, the lowest since June 1983, amid supply tightening due to the U.S.-Iran conflict. Several sulphur vessels, including the Espada X, MV Toro, Yan Dang Shan, and Xin Qi Men, have exited the Strait of Hormuz since the peace deal was signed, with destinations including Morocco, Jordan, Indonesia, and China. These follow earlier transits by vessels like the Nejat, Abu Al Abyad, and Safeen Al Nasr. Approximately 500,000 tons of sulphur are believed to remain loaded onto ships in the strait, much of it committed under prior contracts. Some vessel operators have faced confusion and turned back due to a lack of permission, with many considering the crossing too risky.