Brent crude drops below $74 for first time since Iran war began
By Aboki Forex —
International benchmark Brent crude briefly fell below $74 a barrel on Wednesday afternoon. It had traded below $75 since midday for the first time since the Iran war started on 28 February.
Investor confidence is rising. Tanker traffic through the Strait of Hormuz is increasing. Progress in US-Iran peace talks is also helping. But disagreements over nuclear inspections and sanctions remain. Analysts question how durable any agreement will be.
Shipping through the Strait of Hormuz is slowly recovering after months of disruption. Traffic is still below pre-war levels. Before the conflict, the strait saw 125 to 140 vessel crossings daily. That included about 20 million barrels of oil and petroleum products each day. That is roughly a quarter of global seaborne oil trade.
The International Energy Agency says UAE oil exports have rebounded to nearly 85% of pre-war levels. In early June, exports reached about 4.3 million barrels per day. That is up from 1.9 million barrels per day in March.
Reuters reports that traders are now factoring in the return of Iranian crude exports. A temporary sanctions waiver and peace progress are driving this. Analysts say this is pushing oil prices lower, beyond the recovery in tanker traffic.
Oil prices have fallen nearly 40% from wartime highs. Brent crude peaked at around $118 a barrel. Brent futures for next-month delivery have traded below $80 in recent days. They remain above $72.48, the level on the day before the war began.
Benchmark US crude fell to $70.36 a barrel by 3 pm CEST. It was around $67 before the war.
Trump targets US fuel prices
President Donald Trump said the Justice Department will investigate oil companies for price gouging. He posted on social media that gasoline prices are not matching the decline in oil prices. He said he instructed the Justice Department to start looking into this immediately.
US crude oil prices have eased after the interim deal with Iran. Prices at the pump average $3.93 a gallon, according to AAA. Gasoline costs have fallen over the past month but not as much as Trump wants.
Trump posted that customers are being gouged.