Oil prices plunge as markets await crucial Hormuz Strait decision
Photo: New developments in the oil market (Getty Images)
Global oil prices have fallen by about 3% over the past 24 hours. This trend has been observed for several days now, according to Reuters.
Brent fell to $86.28 per barrel, while US WTI dropped to $80.29.
During trading, prices for both grades fell to their lowest levels in nearly two weeks.
The day before, Brent and WTI also fell by over 3%.
Moreover, since the start of the week, Brent has fallen by about 9%, and WTI by 8%.
One of the main factors contributing to the price decline was hope for the resumption of shipping through the Strait of Hormuz.
Iran and Oman discussed establishing a temporary navigation corridor and jointly clearing mines from the strait.
Before the US and Israel launched their war against Iran in February, approximately one-fifth of global oil and liquefied natural gas shipments passed through the Strait of Hormuz.
However, there is still no full-scale traffic through the strait. According to Kpler, only five cargo ships passed through it on Tuesday, compared to an average of about 15 over the previous ten days.
Mitsuru Muraishi, an analyst at Fujitomi Securities, notes that expectations of progress in the negotiations prompted traders to sell oil. At the same time, uncertainty surrounding the situation is prompting some market participants to buy oil after prices fall, preventing them from dropping even further.
Currently, China is increasing its purchases of Russian oil, creating problems for India.
Russia is rerouting Kazakh oil exports from the Baltic port of Ust-Luga to the Black Sea port of Novorossiysk.
