US-Iran Talks Send Crude Oil Prices Plummeting

Crude oil prices are under pressure today due to growing optimism that the US and Iran are nearing a deal to reopen the Strait of Hormuz. According to reports, Iranian and Omani negotiators have finalized a draft deal to reopen the waterway, which would involve no tolls or fees. Inbound vessels would use a northern lane, while outbound traffic would use a southern one.

Crude prices initially moved higher in overnight trading after a Houthi military spokesperson said the group will escalate attacks on Saudi oil tankers in the northern Red Sea to prevent them from transiting the area. However, this optimism has pushed crude oil prices lower today, falling to a 3-week low.

Additionally, robust crude supplies in China may reduce Chinese crude purchases in the near term, a bearish factor for oil prices. China's crude inventories remain abundant, with supplies falling by only 54 million bbl since early May to around 1.2 billion bbl, according to data from Kpler.