Oil price falls to pre-Iran war levels as more tankers exit strait of Hormuz | Oil

As more oil tankers passed through the Strait of Hormuz, oil prices fell to pre-Iran war levels.

Global benchmark Brent crude oil fell to $72.24 per barrel on Thursday; This is slightly lower than the day before the United States and Israel launched missile attacks on Tehran on February 28. Prices have fallen more than 20 percent this month.

Brent crude for August delivery is trading lower than September, when it was priced at $73.59, signaling ample short-term supply.

Ship traffic in the Strait of Hormuz, a vital shipping passage, has doubled in the previous 24 hours, reaching its highest level since late February, according to CNN and MarineTraffic data.

İpek Özkardeskaya, a senior analyst at Swissquote banking group, said news that ships are now passing through the strait with satellite signals turned on helped reduce oil prices.

He added: “The release of strategic stockpiles, the collapse of demand from top buyer China, and a significant number of tankers quietly leaving the Persian Gulf ‘dark’ have contributed to a small oversupply in some key markets.”

Susannah Streeter, chief investment strategist at the Wealth Club platform, said: “With oil prices falling back to pre-crisis levels, fears of a prolonged global energy crisis sparked by the Iran conflict are fading.”

The decline in oil prices reduced concerns about the possibility of a new inflation shock.

Stock markets on both sides of the Atlantic were higher on Thursday. The Pan-European Stoxx 600 index reached a record high, as did the Dow Jones.

In England, Bank of England Governor Andrew Bailey welcomed this development. The decrease in tensions in the Middle East that brought oil prices to pre-Iran war levels.

Speaking to the Shetland Times during a trip to the Scottish islands, he said: “There were comments from the US that this would be over soon – it would take almost a month.

“But the ceasefire seems to have broken down. What’s interesting is that there’s been a pretty sharp drop in energy prices, especially this week.”

The RAC said the drop in oil prices meant petrol in the UK would fall below 150p per liter on average in the coming days, making unleaded petrol the cheapest in three months. Diesel should fall below 160p.

“We are calling on retailers to immediately pass on the savings they make in the wholesale market to drivers,” RAC spokesman Simon Williams said.

Petrol peaked at 159.53 pence on 28 May, and diesel peaked at 191.54 pence on 15 April.

On Thursday, a Liberian-registered oil tanker exited the Strait of Hormuz using a new route close to Oman backed by the UN maritime agency, despite threats from Iran’s Islamic Revolutionary Guard Corps.

Tensions are escalating again regarding the terms of the interim agreement reached between Iran and the United States. In the memorandum of understanding signed last week, both sides agreed on a 60-day period to negotiate a permanent peace agreement.

The biggest threat to the agreement is Lebanon. Israel carried out an airstrike in southern Lebanon on Wednesday that killed two people, the country’s state news agency said. This was Israel’s first airstrike on the country since the latest ceasefire came into force on Saturday.

Streeter said: “There is still a long way to go to clear the backlog and fully meet demand, but oil prices are in decline as oil-producing countries turn on the taps and infrastructure repairs continue. Energy efficiency measures adopted during the crisis, combined with fears that global growth will slow, are contributing to the bearish outlook for the sector.”

“But for Europe, languishing under a punishing heatwave, one energy shock is replacing another. Wholesale electricity prices in the evening reached multi-year highs in many European markets this week. Offices and public buildings are cranking up cooling systems, while portable air conditioners and fans are being turned on as people try to cope with record-breaking heat.”

Özkardeskaya predicted that oil prices will probably hover between 60 and 80 dollars per barrel in the coming weeks.

“Geopolitical risks remain as the Middle East is rarely a calm sea, China will begin to tap the oil market as tensions ease, and countries will begin to replenish their strategic reserves by absorbing some of the additional supply,” he said.