Oil price falls to levels not seen since before Iran war
Oil prices have fallen to levels not seen since the Iran war as traffic on the shipping route across the Strait of Hormuz slowly resumes.
Global benchmark Brent crude briefly fell below $72.48 (£55) per barrel; This was the price the day before the United States and Israel launched an attack on Iran on February 28, rising to $72.63.
Energy prices rose wildly after Iran responded to the attacks by effectively closing the strait, a critical waterway for oil and gas shipments.
The cost of crude oil has been falling sharply since the United States and Iran signed a Memorandum of Understanding (MOU) on June 17 that set a 60-day period for negotiations on Tehran’s nuclear program and other measures to end the war.
Representatives of the two sides met in Switzerland last weekend to try to end the war, resulting in the United States partially lifting sanctions on Iran’s oil exports.
According to maritime intelligence firm Kpler, the number of ships passing through the Strait of Hormuz has increased significantly since the signing of the Memorandum of Understanding.
Ships passing through the waterway in recent days include those carrying crude oil, liquefied natural gas (LNG), fertilizer and other goods, Kpler told the BBC.
The United States and Iran have established a “line of communication” to avoid misunderstandings “to ensure the safe passage of commercial ships through the Strait of Hormuz,” mediators Qatar and Pakistan said in a joint statement on Monday.
Dimitris Maniatis, general manager of Marisks, a maritime risk consultancy firm that works with ships stranded in the region, said there has been a “tremendous change” in recent days as many more ships are using the strait.
His company estimates that about 80 ships have passed through the Strait of Hormuz since Monday, following the first round of peace talks between the United States and Iran in Switzerland.
He said a limited number of ships could pass through the northern passageway with permission from Iranian authorities.
Maniatis said the U.S. Navy is also providing guidance to ships to navigate the southern route, which is protected from mines and other obstacles put in place since the war.
However, the number of ships passing the strait is still below the pre-war level of more than 100 ships per day.
It appears that hundreds of ships are still waiting in the Gulf.
Fuel prices at the pump rose sharply when the Iran war began, and now the focus is on how quickly those prices will fall.
The average price of regular gasoline in the U.S. has fallen to about $3.93 after reaching $4 per gallon in April, the highest since 2022, but is still well above pre-war levels.
US President Donald Trump on Wednesday ordered an investigation into major energy companies, accusing Shell, ExxonMobil and other firms of “gouging” drivers by not lowering fuel prices as oil costs fell.
“Oil prices have dropped so much and we’re not seeing anything at the pump like it should be,” Trump told reporters in the Oval Office. he said.
The American Petroleum Institute, which represents the oil and gas industry in the United States, said fuel prices “are not moving in line with crude oil.”
British energy firms have faced similar accusations of unfairly raising oil prices since the Iran war.
The UK competition watchdog said last month there was no widespread evidence of this, adding that average profit margins were “generally unchanged” between February and March.
