Iran, Oman seek Strait of Hormuz reopening deal as supply risks persist
Oil prices extended their decline Monday as the pause in U.S.-Iran hostilities opened a window for diplomatic efforts to reopen the Strait of Hormuz, with Iran and Oman seeking an agreement to resume flows.
The front-month Brent crude contract slid 2.3% to $86.31 a barrel in European trading, the Wall Street Journal reported, after settling 8.7% lower in the previous session. West Texas Intermediate crude fell 2% to $80.93 a barrel. In early Asian trade, WTI was down 0.6% at $82.08 a barrel.
The price declines followed the third consecutive night without U.S. strikes on Iran, a “pause” in hostilities that continued as Iran signaled it was refraining from any retaliatory attacks, the Journal reported. The Caspian Pipeline Consortium terminal resumed loading operations after a week-long suspension, according to the Journal, adding another point of relief for oil markets.
Iran and Oman are seeking an agreement to reopen the Strait of Hormuz, the Journal reported.
Saudi Arabia said it intercepted drones launched by Iran-backed militias in Iraq that were targeting the kingdom’s oil facilities, according to the Journal.
Goldman Sachs analysts, cited by the Journal, reported that Persian Gulf oil flows have dropped to 41% of prewar levels. Red Sea shipments fell by more than 3 million barrels a day over the past week, they said, as Saudi Arabia rerouted some exports via the Suez Canal and Russia sharply reduced its Red Sea shipments.