WASHINGTON (dpa-AFX) - Partially offsetting the surge from yesterday's session, crude oil prices have plummeted on Tuesday as increasing tanker traffic across the Strait of Hormuz eased supply concerns while investors focused on the U.S.-Iran indirect talks in Qatar.
WTI Crude Oil for August month delivery was last seen trading down by $1.29 (or 1.82%) at $69.46 per barrel.
Last weekend, an exchange of attacks between U.S. and Iranian forces cast doubts on the June 17 Memorandum of Understanding signed between both nations according to which they had agreed to halt their mutual attacks for a 60-day period.
Following the MoU, Iran reopened the Strait of Hormuz, which was shut since February 28 and in turn, the U.S. permitted Iran to export its oil, petroleum, and petroleum products until August 21.
Shipping traffic resumed from the Persian Gulf after a long wait by traders as a result of which crude oil prices started declining due to diminishing supply concerns.
Last Thursday, after a projectile hit a Singapore-flagged vessel, U.S. forces conducted attacks on Iran, prompting retaliation from Iran.
Again, another Panama-flagged vessel was hit on Saturday with an unidentified projectile leading to retaliatory strikes by the U.S. with counter-retaliatory attacks by Iran on the U.S. bases in Kuwait and Bahrain.
Following these tit-for-tat attacks, concerns over the longevity of the truce started to increase.
Yesterday, U.S. President Donald Trump posted over social media that Iran has requested a meeting with the U.S. representatives and added that a discussion in scheduled in Doha, Qatar for today.
Iran denied these claims and Iran's Foreign Ministry Spokesperson Esmaeil Baghaei stated that Iran's representatives are visiting Doha in connection with the implementation of the MoU. He ruled out the next phase of talks at this stage.
Trump's Special Middle East Envoy Steve Witkoff and Trump's son-in-law Jared Kushner have arrived in Qatar for talks with mediators.
Despite these uncertainties, the Strait of Hormuz remains open and shipping traffic is picking up gradually.
Saudi Arabia, the United Arab Emirates, and Qatar are loading oil and LNG onto vessels in the Persian Gulf at a frantic pace. Iran is renewing loadings from Kharg Island.
Quoting Kpler's ship-tracking data, Bloomberg reported that a total of 24 commodity vessels including crude oil tankers, LNG carriers, and bulk ships transited the Strait of Hormuz in both directions yesterday.
In addition, supertankers entered the gulf, suggesting growing optimism among oil producers and shipowners about safe trips out through the strait, loaded with crude oil.
Oil prices are close to post a 20% monthly decline and a 30% quarterly nosedive.
Investors are cautiously optimistic of the progress in oil and energy trade in the Persian Gulf.
Concerns of re-escalation continue as Iran has expressed its intention to control the strategically significant Strait of Hormuz while the U.S. has been repeatedly asserting that the strait will remain free for all international ships after the final U.S.-Iran deal is made.
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