Oil and Petrol Prices Drop as US and Iran End Strait of Hormuz Conflict
By Aboki Forex —
Oil prices and retail petrol costs fell sharply after the United States and Iran agreed to end their months long standoff and reopen the Strait of Hormuz. This deal triggered a rush of ships crossing the vital oil passage.
Brent crude slipped 1.3% to near $78 a barrel in London. It briefly touched the lowest level since early March. The agreement wiped away more of the price gains built up during the conflict.
President Donald Trump signed a memorandum of understanding that aims to reopen the Persian Gulf conduit quickly. Iranian President Masoud Pezeshkian shared a copy of the agreement on social media on Thursday.
In the United States, petrol prices dropped below $4 a gallon for the first time since March. The end of tensions paves the way for major exporters like Saudi Arabia, the United Arab Emirates and Iraq to restart millions of barrels of oil production. The earlier disruption had pushed fuel prices to record highs.
Asian refiners are already well supplied. A wave of new cargoes could push prices even lower. Oil has already lost about 38% since hitting a four month high in April.
Vessel tracking data shows early signs of progress. Four supertankers, including three controlled by Saudi Arabia's Bahri, were seen leaving through the Strait of Hormuz. A ship carrying Qatari liquefied natural gas and a Chinese fuel tanker also crossed. Four Iranian tankers and two more vessels were spotted moving through the channel.