Oil Prices Plummet as Hormuz Strait Reopening Talks Gain Momentum
US crude oil futures continue to trade below $76 per barrel as tensions ease in the Strait of Hormuz. The narrow Gulf channel has been at the center of a diplomatic effort between the US, Iran, and Oman to reopen it for international shipping.
A potential interim deal would see inbound vessels traverse Iran's territorial waters while outbound ships travel through Oman's waters in coordination with Tehran. According to Tehran's Foreign Ministry spokesman, Esmail Baghaei, negotiations are nearing completion, saying 'if some third parties do not obstruct work in this regard, the joint statement of the two countries, including the main considerations and agreed points, is also in the final review and drafting stage.'
The developments come as US Treasury Secretary Scott Bessent told CNBC that an agreement to reopen the vital global chokepoint was close. President Donald Trump has also expressed optimism, stating 'a lot of progress has been made'.
Oil prices have seen a significant decline in recent weeks, with September West Texas Intermediate (WTI) crude oil futures falling $0.56, or 0.74%, to $75.21 per barrel on the New York Mercantile Exchange. This represents an 11% drop over the past week.
New Energy Information Administration data also show that US crude oil inventories rose by 2.479 million barrels for the week ending July 31, up from the previous week's drawdown of 7.167 million barrels.