WASHINGTON (dpa-AFX) - Extending the losses from the two previous sessions, crude oil prices have moved lower on Tuesday following active shipping movements across the Strait of Hormuz since its reopening, which eased supply disruption concerns.
WTI Crude Oil for August month delivery was last seen trading down by $0.71 (or 0.96%) at $73.15 per barrel.
Last Wednesday, the U.S. and Iran signed a Memorandum of Understanding to extend the already-agreed ceasefire for a period of 60 days and to discuss all contentious issues during this interval.
As a first step, Iran reopened the Strait of Hormuz which it had closed since the beginning of the U.S.-Iran war on February 28. Hundreds of ships were stranded, and thousands of sailors remained trapped inside with their survival resources depleting day by day.
On Sunday, the U.S. Treasury Office of Foreign Assets Control gave a license to Iran authorizing the production, delivery, and sale of its crude oil, petrochemical products, and refined oil products of Iranian origin until August 21.
Meanwhile, negotiators from the U.S. and Iran concluded their first round of technical talks in Switzerland. U.S. Vice President JD Vance who headed the delegations stated that good progress has been made.
Iran's U.N. Envoy Ali Bahreini announced that the strait has been opened fully without any tolls or transit fees which will remain in effect over the 60-day ceasefire period.
While U.S. President Donald Trump categorically asserted through his social media posts that Iran has agreed to allow inspectors from the International Atomic Energy Agency back into the country, Bahreini refuted the claim and observed that discussions on Iran's nuclear programs will happen only in the next stage.
Today, Trump announced that a record 19 million barrels of oil flowed out of Hormuz Strait yesterday.
Reportedly, before the MoU was signed, many tankers were moving around the strait in 'Dark Mode' by switching off their transponders and AIS positioning fearing attacks. Bloomberg reported that after the signing of the MoU, more vessels are broadcasting their position, indicating the recovery of confidence.
Despite the picking up of traffic across the Strait of Hormuz, questions surrounding the future control of the vital waterway which was free for movement and with no tolls levied for all ships until February 28 continue to linger.
No country is the owner of the Strait of Hormuz which is bordering both Iran and Oman. The interim deal does not assure that the strait will remain toll-free after the 60-day window. The uncertainty over any form of toll collection either by the U.S., or Iran or both in the long-term has limited the enthusiasm of fleet owners.
In addition, Iran is yet to begin the de-mining work as agreed, and reportedly, the main central route of the channel remains closed compelling ships to navigate through the smaller northern and southern routes which run through Iranian waters and Omani waters, respectively.
Today, after the talks with Iran's Parliament Speaker Mohammad Bagher Qalibaf, Oman's Foreign Ministry stated that Oman and Iran have agreed to establish a joint working group to negotiate the future management of the strait and guarantee safe passage for all ships in accordance with international law.
Maritime data and analytics company Kpler announced 71 ships traveling through the strait between Friday and Sunday. Before the conflict erupted, everyday nearly 100 to 130 vessels journeyed across the strait.
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