Global benchmark Brent crude briefly dipped below $72.48 a barrel on Thursday – the level last seen the day before US and Israeli strikes on Iran on 28 February – before edging up to $73.23. The drop follows signs that traffic through the Strait of Hormuz is gradually resuming after Iran effectively closed the waterway in response to the attacks.
The price of oil has been on a wild ride since the conflict began, but has moved sharply lower since the US and Iran signed a Memorandum of Understanding on 17 June setting out a 60-day negotiation period over Tehran's nuclear programme and other measures to end the war. Representatives from both sides met in Switzerland last weekend for talks, which resulted in the US partially lifting sanctions on Iranian oil exports.
“Brent crude fell below $72.48 a barrel as Strait of Hormuz shipping resumes after Iran war.”
“Markets are still watching the region closely, and any renewed tensions could quickly send oil higher again,” said Pratibha Thaker, regional director of Middle East and Africa at the Economist Intelligence Unit.
Data from maritime intelligence firm Kpler shows the number of vessels crossing the strait has risen significantly since the MOU was signed. Between 18 June, the day after the deal, and the latest count, 284 vessels have made the transit – though that remains well below the pre-conflict average of around 138 crossings per day. The ships include those carrying crude oil, liquefied natural gas (LNG), fertiliser and other goods, Kpler told the BBC.
Dimitris Maniatis, chief executive of maritime risk advisory firm Marisks, which works with ships stuck in the region, described a “tremendous shift” in recent days. He said a limited number of ships are using a northern passageway with Iranian permission, while the US navy has provided guidance for vessels to travel via a southern route cleared of mines and other obstacles. But hundreds of vessels still appear to be waiting in the Gulf.
Mediators Qatar and Pakistan said in a joint statement on Monday that the US and Iran had formed a “communication line” to prevent misunderstandings “with the aim of safe passage for commercial vessels through the Strait of Hormuz”.
Fuel prices at the pump rose sharply when the war began. The focus now is on how quickly they will fall.