Oil prices are falling amid expectations that transit through the Strait of Hormuz will resume — Reuters
Global oil prices continued to fall on June 16 as market participants assessed the likelihood of a resumption of supplies through the strategically important Strait of Hormuz.
The price drop comes amid instability in physical markets and a lack of detailed information regarding a preliminary agreement to cease hostilities with Iran.
Despite the overall decline, the potential for further significant price drops in crude oil remains limited due to ongoing geopolitical risks.
This is reported by Reuters, analyzing morning data from leading global trading platforms.
As of 04:36 GMT, futures for benchmark Brent crude fell by 25 cents, or 0.3%, to $82.92 per barrel.
Meanwhile, U.S. West Texas Intermediate crude lost 9 cents, or 0.1%, bringing its price down to $80.66 per barrel.
Some financial analysts predict a fairly rapid resumption of safe transportation of crude oil through the Strait of Hormuz, while other factors continue to weigh on the physical market.
Experts at major investment banks believe that the normalization of logistics routes will be gradual and will take at least several months.
They expect supplies to stabilize sooner than previously anticipated, thanks to recent diplomatic breakthroughs.
“It will likely take several weeks for tanker traffic to fully resume. We forecast that 50% of production volumes will be restored by September and 80% by December, which is somewhat faster than our previous expectations,” Morgan Stanley analysts noted in their weekly research note to commercial clients.
Preliminary information from diplomatic sources indicates that a framework agreement between the U.S. and Iran could allow the Strait of Hormuz to be opened to international commercial shipping.
The agreement provides for the extension of the current ceasefire for up to 60 days.
This period is intended to give international partners and the parties directly involved in the conflict additional time to resolve complex issues, particularly regarding the future of Iran’s nuclear program.
This was reported by Reuters.
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