Oil gets cheaper on expectations of shipping resumption through Hormuz
Oil prices remained under pressure on August 6 amid expectations of energy carriers resuming movement through the Strait of Hormuz. Brent crude was trading near $79-80 per barrel, while US WTI was around $75-76.
During the session, quotes fluctuated noticeably. Brent fell to $78.11 per barrel, after which it recovered to approximately $79.97. WTI depreciated to $74.24, but later returned to $75.77 per barrel.
In the first three trading sessions of the week, WTI lost about 11%. Investors were reducing the geopolitical premium priced in following reports of progress in talks between Iran and Oman on a new scheme for commercial shipping.
According to Iranian representatives, the parties have generally agreed on routes for ships that will enter and exit the Strait of Hormuz. A joint statement is under final coordination, and the temporary scheme could last from two to four months or longer.
At the same time, the agreement itself will not mean a full opening of the strait. For its implementation, a separate decision of the Iranian leadership is needed, and Tehran continues to link the resumption of shipping with US actions. Market participants are also waiting for official confirmation of details from Oman.
Oman earlier confirmed that, together with Iran, it is working on a future order of shipping management, safe passage of ships, and the creation of temporary maritime corridors. Muscat insists that traffic through the strait must comply with international law.
US President Donald Trump stated that Washington is negotiating with Tehran, but did not specify their content. Iranian officials, in turn, deny direct negotiations with the US specifically regarding the new ship movement scheme.
Despite falling prices, traders are not yet rushing to completely abandon bets on oil price increases. The risk of a new escalation between the US and Iran remains high, and the final terms and timelines for restoring full shipping through the strait have not yet been determined.
Based on materials from: Bloomberg, MarketWatch, MFA of Oman
