Oil futures extended losses on Wednesday, trading near levels not seen since early March, after fresh signs emerged that crude shipments through the Strait of Hormuz could be restoring to a more regular pattern.
Prices and moves
Brent crude futures fell 37 cents, or 0.5%, to $76.71 a barrel as of 0043 GMT, while U.S. West Texas Intermediate eased 36 cents, or 0.5%, to $72.85 a barrel. Both benchmarks had declined by nearly 1% on Tuesday, touching four-month lows.
Drivers behind the slide
Market participants pointed to several developments weighing on prices this week. Washington granted Tehran a 60-day sanctions waiver following initial peace talks, permitting Iran to sell oil. At the same time, tensions in Lebanon have eased, reducing some of the immediate geopolitical risk premium that had supported crude.
"Crude oil prices were weighed down by hopes of easing U.S.-Iran tensions and a recovery in oil shipments through the Strait of Hormuz," said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting. "Further progress in nuclear negotiations could push prices back to pre-war levels," he added.
Diplomatic and operational discussions are progressing. Oman and Iran agreed on Tuesday to continue talks about the future administration of navigation in the Strait of Hormuz. U.S. Secretary of State Marco Rubio said any Iranian attempt to levy transit fees would violate international law.
Despite these steps, significant uncertainty persists about the durability of any agreement. U.S. President Donald Trump said on Tuesday that Iran had agreed to nuclear inspections into "infinity," while Tehran said it had made no such concession in negotiations.
Shipping and logistical signals
Investors are monitoring how rapidly Middle Eastern producers can resume exports and whether additional ships will enter the Gulf. An Iranian military source told Fars news agency that a limited number of vessels are being allowed to pass through the strait each day under coordination with Iran's Revolutionary Guards Navy.
Ship-tracking data indicated that three stranded supertankers passed through the strait on Tuesday. The U.N. shipping agency said an evacuation plan is underway to enable hundreds of ships with 11,000 seafarers who have been stranded in the Gulf to sail through the strait after the U.S.-Iran ceasefire deal.
Stocks and inventory notes
Domestic crude stocks showed a modest decline in the most recent API data. Market sources citing the American Petroleum Institute said crude stocks fell by 765,000 barrels in the week ended June 19, according to data released on Tuesday. By contrast, a Reuters poll of nine analysts produced an average estimate of a roughly 4.5 million-barrel decline in crude inventories for the same week.
This combination of operational reopening in a key waterway, temporary policy moves, and mixed inventory signals has pushed prices lower for now, even as lingering doubts about the permanence of any arrangements continue to leave risk premiums in place.