Oil Prices Slide as Strait of Hormuz Deal Hopes Rise

Oil prices declined for the fourth straight session on Thursday as investors assessed diplomatic efforts to reopen the Strait of Hormuz. Brent crude futures dropped 60 cents, or 0.7%, to $87.24 a barrel, while West Texas Intermediate (WTI) fell 56 cents, or 0.7%, to $81.67 a barrel.

The decline follows diplomatic efforts between Iran and Oman to finalize an agreement on the Strait of Hormuz, which is crucial for global energy trade. Before the US-Israeli war with Iran began on February 28, the waterway carried oil and natural gas equal to about one-fifth of global fuel consumption.

Daniel Hynes, a senior commodity strategist at ANZ, attributed the lower crude prices to improved prospects for reopening the strait. However, he warned that the market still faces supply shortages due to the combined impact of the Middle East conflict and the Russia-Ukraine war.