Global oil prices dropped sharply this week and are on track for their biggest weekly loss in months. The decline comes as shipping activity slowly returns to normal through the Strait of Hormuz after a temporary peace agreement between the United States and Iran eased fears of major supply disruptions.
Brent crude fell to around $79 per barrel, down nearly 9% for the week. U.S. West Texas Intermediate (WTI) crude also slipped, trading close to $75 per barrel.
The market reacted positively as oil tankers that had been stuck near the Strait of Hormuz began moving again. Kuwait also announced plans to gradually increase oil production, adding to expectations of higher supply.
Reports show that tankers carrying nearly 10 million barrels of oil are either passing through or waiting near the Strait. Among them are the first Saudi oil tankers seen in the area since the conflict started more than three months ago.
The Strait of Hormuz is one of the world’s most important oil routes. According to the International Energy Agency, around 20 million barrels of oil and petroleum products normally pass through the waterway every day.
Adding to the improved outlook, the U.S. Central Command announced that restrictions on maritime traffic to and from Iranian ports and coastal areas have been lifted. Meanwhile, the Combined Maritime Information Center advised ships to travel closer to the Omani coast to avoid possible dangers, including sea mines.
With supply concerns easing and more oil expected to reach global markets, traders are closely watching whether prices will continue to move lower in the coming weeks.
