Oil prices continue to decline: Brent is trading just above $$108 per barrel, while WTI has dropped to $$100.41. Tensions remain on the market due to the situation in the Strait of Hormuz and uncertainty surrounding the US-Iran talks.
Brent and WTI continue to decline
Oil continues to fall in price on global markets. July futures for Brent on the London ICE Futures exchange as of 8:09 a.m. are estimated at $108.1 per barrel, which is $1.77 (1,61%) less than at the close of the previous session. The day before, these contracts had already fallen by $4.57 (4%) to $109.87 per barrel.
June futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) also fell by $1.86 (1.82%) to $100.41 per barrel. In the previous trading session, they lost $4.15 (3.9%) to settle at $102.27 per barrel. According to reports, the market is focused on the situation in the Middle East.
LSEG analyst tells more about the dynamics of oil prices Anh Pham. He notes that prices remain at elevated levels and the prospects for a peace deal between the US and Iran are still uncertain.
The situation in the Middle East and the role of the United States
American president Donald Trump on Tuesday announced “significant progress towards a full and final agreement” with Iran. According to him, the United States is suspending the Freedom Project to escort ships through the Strait of Hormuz “for a short period” to assess the possibility of finalising and concluding a peace agreement with Tehran.
The markets took this statement as a potential signal of de-escalation of the conflict, which raised hopes for a gradual resumption of oil supplies from the Persian Gulf. However, experts point out that even if an agreement is reached, it will take time for trade flows to fully resume.
The Strait of Hormuz and the decline in reserves
Meanwhile blocking the Strait of Hormuz continues. The suspension of vessel traffic through this key supply channel has led to a significant reduction in global oil storage inventories. This puts additional pressure on the market and keeps prices relatively high, despite their current decline.
The American Petroleum Institute (API) reported that US oil reserves decreased by 8.1 million barrels over the past week, while analysts at Trading Economics expected a decline of only 2.8 million barrels. Data from the US Department of Energy, which is more important for the market, will be released today at 17:30 pm.
Why it matters
The fall in Brent and WTI crude oil prices is having an impact on global energy markets, the economies of exporting countries and global inflation. The situation in the Middle East, in particular in the Strait of Hormuz, remains a key factor in determining further price dynamics.
The decline in US oil stocks could lead to a new wave of market volatility, especially if negotiations between the US and Iran drag on or fail to yield the expected results. For Ukraine and other energy-importing countries, this creates additional risks and uncertainty in energy security.
