Oil Prices On June 24: Oil prices traded lower on Wednesday after settling 1% lower in the previous session as investors kept a close watch on crude flows through the Strait of Hormuz following signs of progress in US-Iran peace talks. Brent futures last traded 0.17% lower at $76.47 per barrel. The benchmark closed down 82 cents, or 1.1%, at $77.08 on Tuesday, while US West Texas Intermediate futures finished 65 cents, or 0.9%, lower at $73.21 per barrel. Both benchmarks hit near-four-month lows yesterday.
Oil prices have been trending down after falling 3% on Monday after the United States granted Iran a 60-day sanctions waiver following initial peace talks, and as officials reported a lull in hostilities in Lebanon under a broader agreement. On Tuesday, Oman and Iran agreed to press on with discussions about the future administration of navigation in the Strait of Hormuz. US Secretary of State Marco Rubio said on Tuesday that Iran would not be able to charge tolls in the key waterway as part of any final agreement with the United States, saying such an arrangement would violate international law.
The world has lost millions of barrels of oil and gas supply since the Iran war closed the strait, a chokepoint for about a fifth of the world's oil and LNG supplies, for more than three months. At its peak, more than 14 million barrels per day (bpd) of oil output was shut-in, or about 14% of world demand, according to the International Energy Agency. Investors now are cautiously watching how quickly Middle Eastern producers can resume oil production and exports following damage from the war, and whether more ships will enter the region.
An Iranian military source told Fars news agency that a limited number of vessels are being allowed to pass through the strait each day under coordination with Iran's Revolutionary Guards Navy. Separately, ship-tracking data showed that three stranded supertankers passed through the strait on Tuesday, while seven empty Qatar-linked liquefied natural gas tankers have entered in recent weeks. The UN shipping agency said an evacuation plan to enable hundreds of ships with 11,000 seafarers stranded in the Gulf to sail through the strait is underway after the US-Iran ceasefire deal.
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