Oil Prices Tumble on Eased Hormuz Concerns and Hawkish Fed Outlook
Oil prices continued to decline on Thursday as diplomatic efforts to reopen the Strait of Hormuz eased supply concerns. The international benchmark Brent crude futures traded at $85.80 per barrel, down 1.3% from the previous close of $86.94.
The Qatari Prime Minister and Foreign Minister, Mohammed bin Abdulrahman Al Thani, is expected to travel to Tehran on Thursday to meet Iranian officials for talks aimed at de-escalating regional tensions and advancing negotiations over the Strait of Hormuz.
Iranian Deputy Foreign Minister Kazem Gharibabadi announced an agreement between Iran and Oman to activate a joint corridor through the strait, which would allow for the reopening of the waterway under arrangements determined by Tehran.
The US has shifted its focus from military strikes to economic pressure on Iran, with Secretary of State Marco Rubio reportedly telling foreign ministers that Washington plans to prioritize economic pressure over further military strikes.
Stronger-than-expected US inflation data reinforced expectations that the Federal Reserve could maintain its restrictive monetary policy for longer, putting downward pressure on oil prices.