Oil Prices Plunge as Iran-Oman Talks Progress on Strait of Hormuz Reopening
Oil prices have dropped on Thursday due to progress in Iran-Oman shipping talks. The negotiations aim to reopen the Strait of Hormuz, a crucial trade route for energy supplies.
The Brent crude futures fell by $0.33 (or 0.42%) to $79.12 per barrel at 0418 GMT, while US West Texas Intermediate futures declined by $0.42 (or 0.56%) to $74.80 per barrel.
Iran and Oman have reached an understanding on the geographic coordinates for a shipping route through the Strait of Hormuz, but certain third parties could interfere with the deal.
Economist Yuki Takashima at Nomura Securities stated that 'some selling pressure emerged following reports that talks between Iran and Oman are making progress.' He added that prices have returned to levels seen in June when the US and Iran signed an interim peace agreement, and investors are closely watching for a final deal.
The proposed deal would give Tehran control over ships entering the Gulf through the Strait of Hormuz, which is one of the biggest concessions made by Iran so far. However, there has been no immediate comment from the US on this proposal.