Oil Prices Extend Decline as Strait of Hormuz Traffic Shows Signs of Recovery

Oil prices fell more than 1 percent on Wednesday, extending losses from earlier in the week as signs emerged that shipping activity through the Strait of Hormuz was gradually improving following recent tensions in the Gulf region.

Brent crude futures dropped 78 cents, or 1 percent, to $76.30 a barrel by early trading, while US West Texas Intermediate crude fell 78 cents, or 1.1 percent, to $72.43 a barrel. Both benchmarks had already closed about 1 percent lower on Tuesday and touched their weakest levels since early March.

Market sentiment was weighed down by growing confidence that oil exports from the Gulf could return to more normal levels after disruptions caused by regional conflict. Analysts pointed to an increase in vessel movements through the Strait of Hormuz, one of the world’s most important energy transit routes.

Commodity analysts at ING said recent shipping data indicated a rise in vessel crossings through the strait, although traffic remained below levels recorded before the outbreak of hostilities. The improvement has eased some fears of prolonged supply disruptions that had previously supported higher oil prices.

Additional pressure came from diplomatic developments between the United States and Iran. Washington recently granted Tehran a 60-day sanctions waiver following initial peace talks, allowing Iran to resume oil sales under temporary relief measures. Investors viewed the move as a potential boost to global crude supplies.

Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting, said hopes for easing tensions between Washington and Tehran and the gradual recovery of oil shipments through the Strait of Hormuz were contributing to the decline in prices. He added that further progress in nuclear negotiations could result in crude prices returning to levels seen before the conflict.

On Tuesday, Oman and Iran agreed to continue discussions regarding the future administration of navigation through the strategic waterway. At the same time, US Secretary of State Marco Rubio stated that any attempt by Iran to impose transit fees on vessels using the strait would violate international law.

Despite the improved outlook, uncertainty remains. US President Donald Trump said Iran had agreed to allow nuclear inspections indefinitely, while Iranian officials rejected that claim, saying no such commitment had been made during negotiations.

Shipping activity continues to be closely monitored. An Iranian military source told local media that a limited number of vessels are being permitted to transit the strait daily under coordination with Iran’s Revolutionary Guards Navy. Ship-tracking data showed that three previously stranded supertankers successfully passed through the route on Tuesday.

The United Nations shipping agency also confirmed that plans are underway to facilitate the movement of hundreds of vessels and more than 11,000 seafarers who remain affected by recent disruptions in the Gulf.

Meanwhile, industry data released by the American Petroleum Institute showed US crude inventories fell by 765,000 barrels in the week ending June 19. Analysts had expected a larger decline of about 4.5 million barrels, adding another factor influencing market sentiment.