Crude oil prices fell on Tuesday as tanker traffic through the Strait of Hormuz became more frequent, indicating that a long-anticipated surge of crude is entering the market.
WTI crude dropped by less than 1%, settling above $73 per barrel. The global benchmark, Brent crude, declined by approximately 1% to around $77 per barrel. Oil prices have fallen significantly since the US and Iran signed an interim peace agreement last week, pledging to reopen the Strait of Hormuz. Current prices are roughly 40% lower than during the peak of the conflict.
Presently, a greater number of vessels are transiting the strait with their satellite signals active. India has dispatched two ships back to the region for the first time since February. The International Maritime Organization has stated it has received security assurances that would allow hundreds of ships to depart the Persian Gulf.
"A simple fact is that flows through the Strait of Hormuz are recovering, and strategic petroleum reserves continue to release oil to the market, which will weigh on prices in the near term," said Joe DeLaura, Global Energy Strategist at Rabobank.
News on Monday that the US issued a 60-day license permitting the sale of some Iranian oil and petroleum products also pressured prices.
August WTI crude fell 0.9% to settle at $73.21 per barrel.
August Brent crude declined 1.1% to $77.08 per barrel.
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