Oil Mixed as Uncertainty Over US-Iran Talks Keeps Strait of Hormuz Tensions in Focus
Summary
- International oil prices traded mixed amid uncertainty over negotiations between the US and Iran.
- Military tensions in the Strait of Hormuz and blockade measures by the US and Iran have left a key maritime route for crude oil and LNG operating under effective restrictions.
- The market expects more ships to pass through the strait, but oil prices may remain range-bound until a formal agreement is announced.
Forecast Trend Report by Period
Oil prices were mixed as uncertainty surrounding negotiations between the US and Iran kept traders focused on tensions in the Strait of Hormuz.
Bloomberg reported on May 26 that West Texas Intermediate traded near $93 a barrel, slightly below the previous session, while Brent settled above $99 after rising about 4% from a day earlier.
Military tensions around the Strait of Hormuz also persisted. The US recently launched airstrikes on targets near the waterway, and Iran's Islamic Revolutionary Guard Corps said it had fired back at a US aircraft that entered Iranian airspace.
The US government maintained that negotiations were still under way. Secretary of State Marco Rubio said reaching an agreement with Iran could take several more days.
The Strait of Hormuz is effectively operating under restrictions because of blockade measures by both the US and Iran. In normal times, the route carries about 20% of global crude oil and liquefied natural gas, or LNG, shipments.
Still, two non-Iranian very large crude carriers were confirmed to have passed through the Strait of Hormuz on May 26. It was the first movement in about a week of roughly 4 million barrels of non-sanctioned oil.
Enverus analyst Carl Larry said the market still expects more vessels to pass through the strait. Until an agreement is formally announced, oil prices are likely to remain range-bound.
Suehyeon Lee
shlee@bloomingbit.ioI'm reporter Suehyeon Lee, your Web3 Moderator.
