LONDON: The price of Brent crude, the international benchmark for oil, has fallen below $75 a barrel for the first time since the outbreak of the Middle East conflict, reflecting growing investor confidence in regional stability.
Brent North Sea crude declined by 3.1 per cent to $74.73 a barrel, extending losses recorded since the United States and Iran reached an agreement last week to end hostilities that began on 28 February.
Oil prices continued their downward trend on 24 May, with Brent dropping below $74 a barrel as concerns over potential disruptions to global energy supplies eased.
Market sentiment has improved amid increasing tanker traffic through the Strait of Hormuz and progress in negotiations between Washington and Tehran. However, key issues, including nuclear inspections and sanctions, remain unresolved, according to Euronews.
Shipping activity through the Strait of Hormuz is gradually recovering after months of heightened tensions, although volumes remain below pre-conflict levels. Prior to the war, between 125 and 140 vessels carrying approximately 20 million barrels of oil and petroleum products passed through the strategic waterway each day.
Brent crude prices fall by nearly 40 percent
Brent crude prices have now fallen by nearly 40 per cent from their wartime peak of around $118 a barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude slipped to $70.36 a barrel, compared with roughly $67 before the conflict began.
Last week, Tehran and Washington signed the Islamabad Memorandum of Understanding laying the groundwork for the negotiations, after a 40-day war that was followed by weeks of ceasefire.
The negotiators aim to tackle some of the most intractable issues that have dogged US-Iranian relations for decades, including Tehran’s nuclear programme and enriched uranium.
Oil prices tumbling: Trump
US President Donald Trump on Tuesday said global oil prices were falling after a record 19 million barrels of oil passed through the Strait of Hormuz in a single day after the United States and Iran on Monday agreed on a 60-day roadmap towards a final agreement during Pakistan and Qatar mediated talks in Switzerland.
In a post on his Truth Social platform, Trump claimed that 19 million barrels of oil flowed through the strategic waterway on Monday. “19 million barrels of oil flowed out of the Hormuz Strait yesterday, an all-time record. Oil prices are tumbling down, and the world is a much safer place!!!” the US President wrote.
US, Iran agree 60-day roadmap for final deal
Mediators Pakistan and Qatar on Monday released a joint statement after the high-level US-Iran direct talks in Switzerland. Pakistan’s Prime Minister Shehbaz Sharif and Chief of Defence Forces and Chief of Army Staff Field Marshal Syed Asim Munir attended the talks as mediators. The Qatari Prime Minister also attended the talks as mediator.
According to a joint statement issued on Monday, the US and Iran have agreed on a 60-day roadmap towards a final agreement following the conclusion of high-level talks in Switzerland mediated by Pakistan and Qatar.
The first session of negotiations under the framework of the Islamabad Memorandum of Understanding concluded at the Burgenstock resort, bringing together representatives of Iran, the United States, Pakistan and Qatar.
The mediating countries described the Lake Lucerne Summit as having been conducted in a “positive and constructive atmosphere” and said “encouraging progress” had been achieved, including the establishment of a mechanism for further technical negotiations.
The parties agreed to establish a High-Level Committee to provide political oversight of the mediation process. Under the arrangement, chief negotiators will regularly report to the committee and lead specialised working groups focusing on nuclear issues, sanctions, monitoring mechanisms and dispute resolution.
