Oil Prices Ease but Remain on Track for Strongest Monthly Gain in Nearly Two Years

Oil prices have eased slightly after signs of improving tanker traffic through the Strait of Hormuz tempered supply concerns. Despite the decline, both Brent crude and West Texas Intermediate (WTI) are on track to record their strongest monthly performance in nearly two years.

The conflict between the United States and Iran had previously disrupted shipping through the world's most important oil transit route, sending Brent briefly above $100 per barrel earlier this month. However, recent reports suggest that more oil tankers have resumed crossing the Strait of Hormuz, easing fears of prolonged supply disruptions.

'There is this sense that there is a lot of supply waiting to hit the market once all of this is resolved, and that is a weight against any kind of dramatic price rise,' said John Kilduff, partner at Again Capital. The analysts at ING also noted that ship-to-ship movements of crude through Hormuz had resumed, although much of the activity remained difficult to track due to vessels operating with their transponders switched off.

The US Energy Secretary Chris Wright stated that approximately 13 million barrels per day of crude oil are now leaving the Persian Gulf, indicating a gradual recovery of export flows despite ongoing hostilities. However, analysts cautioned that upside risks to prices remain, citing the declining level of the U.S. Strategic Petroleum Reserve (SPR) and Saudi Arabia's proposal for a multinational security coalition to strengthen maritime protection around strategic shipping routes.