Oil continues to decline: Transits through the Strait of Hormuz increase
Oil held its decline as more tankers passed through the Strait of Hormuz and progress was made by the US and Iran to end the war.
US crude oil (WTI) traded around $73 a barrel after falling less than 1% in the previous session. Brent crude closed above $77.
Ships passing through the strait with their satellite signals on indicates increased confidence among shipowners, while the International Maritime Organization announced it had received security guarantees allowing hundreds of vessels to exit the Persian Gulf.
The US and Iran signaled progress in the first phase of talks to end the war that began at the end of February. However, negotiations are expected to be prolonged, and contradictory statements continue. Iran and Oman announced they have started working on an agreement regarding the management of the Strait of Hormuz, including the cost of managing transits. This has raised concerns that Tehran could charge fees for crossings.
The Republican-majority US Senate on Tuesday took a rare symbolic step against President Donald Trump, voting to end the US war with Iran. While the decision is not expected to directly change the administration's strategy, it was the latest sign that the President lacks sufficient domestic support for this effort.
Meanwhile, signs of tightness persist in some markets, especially in the US. According to data released by the American Petroleum Institute, which Bloomberg saw, crude oil inventories at the Cushing storage hub in Oklahoma fell by 1 million barrels last week. If confirmed by official data due Wednesday, stocks would fall below the 20-million-barrel minimum operating level generally considered.
