Hormuz Reopening May Send Oil Prices Plummeting

The Strait of Hormuz is expected to reopen after the US-Iran interim deal, releasing millions of barrels of oil into global markets. This could lead to a decline in Middle Eastern crude oil prices.

Kpler analyst Muyu Xu estimated that the reopening of the strait would unleash around 93 million barrels of stranded non-Iranian oil from the Persian Gulf. Another 72 million barrels were previously stuck on tankers west of Chabahar and could be released if Washington grants broader sanctions relief.

Asian refiners have already secured supplies for June to August, but weak refining margins may weigh on fresh purchases. Many Chinese refineries are scheduled to shut for maintenance in July, reducing demand for immediate supplies.