Oil prices continued to decline amid talks between Iran and Oman on restoring shipping through the strategically important Strait of Hormuz. UNN reports this, citing Bloomberg.
Details
West Texas Intermediate (WTI) crude traded below $81 a barrel after falling by approximately 6% over the previous three trading sessions. Meanwhile, Brent ended Tuesday’s trading below $89 a barrel.
The foreign ministers of Iran and Oman discussed establishing a "temporary joint maritime corridor" to facilitate the resumption of vessel traffic through the strait. Technical talks will continue, including on a permanent route, shipping management, and security measures.
Market expects de-escalation
According to Bloomberg, Iran and Oman plan to agree on a permanent shipping route within 30–60 days. Until then, the parties are to use the temporary corridor.
Amid the talks, traders largely ignored the new U.S. economic sanctions against Tehran. Investors expect diplomatic efforts to ease disruptions to oil supplies from the region.
It appears that oil is beginning to price in the prospect of a peace deal instead
At the same time, oil remains significantly more expensive than at the beginning of the year. Its price has risen by more than 40% due to the conflict between the United States and Iran, which has restricted energy supplies from the Persian Gulf.
As of the morning of August 26, October-delivery WTI cost about $81.01 a barrel, down 1.6%. Brent had fallen 3.9% the previous day, to $88.58 a barrel.
The United States and Iran have agreed to a ceasefire and freedom of navigation26.08.26, 00:05