Hormuz Deal Fails to Restore Oil Flows, Brent Crude Prices Plummet

The recent deal aimed at restoring oil flows through the Strait of Hormuz has not yet been signed, and as a result, Brent crude prices have dropped nearly $20 from their July 23 high.

The agreement between Iran and Oman may seem promising, but Tehran is seeking control over who enters and exits the strait, which would essentially create a managed chokepoint rather than a reopened route.

This development has left many wondering if this deal will truly restore oil flows or just temporarily ease tensions. The market's optimism was short-lived in June when similar diplomacy failed to hold, with fighting resuming just three weeks later.

The physical market is also tighter than the futures price suggests, with only 80 million barrels remaining stored in the Gulf and prompt Brent in backwardation.