Oil prices hit lowest since start of Iran war

Oil prices dropped in early Thursday trade to their lowest since the start of the Iran conflict after the US said flows through the Strait of Hormuz were close to pre-war levels.

Brent crude futures fell 1.65 percent to $72.52 a barrel as of 03:37 GMT, while US West Texas Intermediate declined 1.45 percent to $69.32 a barrel.

Speaking at the Reuters Global Energy Forum in New York on Wednesday, US energy secretary Chris Wright said almost 20 million barrels of crude oil had exited the strait in the past 24 hours via 72 ships.

A full return to normal navigation could still take weeks, Wright said, adding that mine-clearing efforts are needed in the narrow waterway.

“The speed of this decline has caught plenty off guard as markets price in a much faster return of Middle Eastern barrels than most had anticipated just a fortnight ago,” Reuters quoted IG analyst Tony Sycamore as saying.

Qatar’s foreign ministry, which is helping to mediate peace talks, said in a statement last week that the US and Iran had agreed on a roadmap to reach a final deal within 60 days.

The US-Iran war began on February 28 and had virtually blocked trade through the strait.

Oman established a temporary maritime corridor on Wednesday, allowing vessels seeking to transit the strait to do so without paying a fee.

Further reading:

• Fujairah emerges as strategic winner from Hormuz closure
• Shipping industry urges caution on Hormuz reopening
• Frank Kane: Trump’s Iran ‘deal’ means the Gulf pays for a war it didn’t want