Oil prices fell on Tuesday after US Energy Secretary Chris Wright said shipping traffic through the Strait of Hormuz was “increasing very significantly.”
American crude oil Futures contracts were down 3.9% at $87.74 a barrel as of 1:04 p.m. ET. Brent futures, the international benchmark, lost about 3% to $91.40
Wright did not provide specific data on the increase in oil flows through Hormuz. He made these remarks in an interview with CNBC’s Brian Sullivan at the Atlantic Council’s World Energy Forum.
Wright said oil exports through Hormuz are increasing and “will continue to increase.”
Oil prices fell even after President Donald Trump accused Iran of shoot down an American Apache helicopter who patrolled Hormuz. Both pilots are safe, but the United States must respond to the attack, Trump said in a statement. social media post.
Hormuz oil flows freelyThere may be more oil moving through Hormuz than is publicly visible, JPMorgan analysts wrote in a June 4 note. The US Navy has silently coordinated with some ships attempting to exit the Persian Gulf.
According to the bank’s estimates, some 2 million barrels per day could be spilled on tankers that have turned off their transponders.
“Despite the ongoing naval blockade and the sharp decline in commercial traffic, surprising volumes of crude and petroleum products still appear to transit the strait,” JPMorgan analysts said.
In the meantime, Asset tried to convince the market on Monday that an agreement with Tehran to reopen Hormuz was possible. “in two or three days”, despite the outbreak of violence between Israel and Iran this week.
Trump has repeatedly said a deal with Tehran to reopen Hormuz is close, but such a deal has yet to materialize. The fragile ceasefire put in place in April almost collapsed this week after Iran launched missiles against Israel in retaliation for its strikes in Lebanon.
Israel responded by striking the Islamic Republic. Trump pressured Israeli Prime Minister Benjamin Netanyahu to refrain from further attacks.
The violence briefly boosted oil prices on Monday, but the series of strikes appears to have ended without further escalation so far. Iran and Israel declared a ceasefire.
Oil prices have jumped about 30% since the United States and Israel attacked Iran on February 28. Tehran retaliated by attacking oil tankers in the Strait of Hormuz and exploiting the sea route. As a result, traffic through Hormuz plummeted, triggering the largest oil supply disruption in history.
Trump sought to pressure Iran into a deal by imposing a naval blockade on its ports and ships.
Oil industry executives and analysts say crude prices have remained subdued relative to the scale of the disruption due to the cushion provided by global inventories. But prices will likely climb later this year as those inventories dwindle rapidly just as summer demand peaks, they say.