Major weekly losses are recorded by oil prices, as improving navigation conditions in the Straits of Hormuz and implementing the interim agreement between the US and Iran enhance expectations of a complete restoration of global energy flows.
The Brent is currently moving at $80 a barrel (+0.8%) with weekly losses approaching 10%, as investors evaluate the first signs of normalization in the Persian Gulf region following the activation of the interim peace agreement between Washington and Tehran.
The deal put an end to a prolonged conflict that had caused the biggest disruption in the world oil supply recorded in recent years, leading prices to intense volatility and causing concerns about energy security internationally.
Restore navigation in Hormuz
A defining role in price deescalation was played by the latest developments in the Straits of Hormuz, from where about one fifth of global maritime oil transport passes.
The US Central Administration (CENTCOM) announced that it removed restrictions on navigation to and from the Iranian ports and coastal waters of the country, facilitating the restart of commercial transport in the region.
At the same time, the Joint Maritime Information Center recommended that ships passing through Ormuz follow routes closer to the coast of Oman, in order to limit risks from possible mines still present at certain points in the passage.
Restarting exports and increasing productionThe first moves to restore energy flows are already visible. Tanks remaining trapped for weeks in the area began leaving the Strait of Hormuz from Thursday, carrying cargo of crude oil that had been delayed due to the crisis.
At the same time, Kuwait announced that it is moving towards an increase in oil production, further strengthening expectations of improving supply on the world market.
These developments have significantly reduced fears of shortages and led to a review of price trends over the next period.
The benefits of the crisis disappear
Deescalation of tension in the Middle East results in oil prices having now erased almost all profits they had recorded after the outbreak of the conflict in late February.
The markets consider that the gradual return of navigation and the restoration of exports from the Persian Gulf could lead to further market normalisation in the coming months, although investors continue to closely monitor the implementation of the agreement and geopolitical developments in the region.