Oil Prices Ease as Strait of Hormuz Tensions Remain in Focus

PUKMEDIA

Oil prices.

Oil prices edged lower on Tuesday as traders assessed the risk of potential supply disruptions, with attention remaining firmly on tensions between Washington and Tehran following new US guidance for vessels transiting the Strait of Hormuz.

According to Reuters, Brent crude futures fell by 18 cents, or 0.26 per cent, to $68.85 a barrel by 03:53 GMT, while US West Texas Intermediate (WTI) crude declined by 21 cents, or 0.33 per cent, to $64.15 a barrel.

The slight pullback followed gains of more than 1 per cent on Monday, after the US Department of Transportation’s Maritime Administration advised US-flagged commercial vessels to keep as far away as possible from Iran’s territorial waters and to verbally refuse permission for Iranian forces to board if requested.

Approximately one-fifth of the world’s oil consumption passes through the Strait of Hormuz, which lies between Oman and Iran, making any escalation in the region a significant risk to global energy supplies.

Iran, along with fellow OPEC members Saudi Arabia, the United Arab Emirates, Kuwait and Iraq, exports the majority of its crude oil through the strait, primarily to Asian markets.

The guidance was issued despite comments last week from Iran’s top diplomat, who said Oman-mediated nuclear talks with the United States had begun positively and were set to continue.

In related developments, the European Union has proposed expanding its sanctions against Russia to include ports in Georgia and Indonesia that handle Russian oil. According to a proposal document reviewed by Reuters, this would mark the first time the bloc targets ports located in third countries as part of its sanctions regime.

The move forms part of broader efforts to tighten restrictions on Russian oil exports, a major source of revenue for Moscow amid the ongoing war in Ukraine.

Elsewhere, traders said Indian Oil Corporation purchased six million barrels of crude from West Africa and the Middle East, as India avoids Russian oil while pursuing a trade agreement with Washington.

Separately, Air Canada announced on Monday that it is suspending flights to Cuba after the country warned it is facing a shortage of jet fuel.



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