Oil is trading lower for the fourth consecutive day, as a revenue-sharing agreement reached between Iran and Oman over the Strait of Hormuz continues to overshadow a fresh escalation in tensions between Ukraine and Russia that could have a significant impact on crude production.
Brent crude, the European benchmark, was down 1.17% to $86.82 per barrel on Thursday morning, having already shed more than 7% of its value since the start of the week. West Texas Intermediate (WTI), the US benchmark, fell 1.36% to $81.12 per barrel, while natural gas trading in Amsterdam slipped 0.51% to €65.44 per megawatt-hour.
On Wednesday, crude prices briefly rose after reports emerged that Russian President Vladimir Putin was planning to escalate the war against Ukraine. However, the trend reversed after the two countries bordering the Strait of Hormuz announced that ‘agreements have been reached regarding each country’s share of the waters of the Strait of Hormuz, as well as Iran’s and Oman’s share of revenues.’
‘The market started pricing in the possibility of another ceasefire between the US and Iran,’ Saul Kavonic, energy analyst at MST Marquee, told Bloomberg. Kavonic said the agreement between the Islamic Republic of Iran and Oman is being interpreted by investors as a potential step toward a broader deal between Tehran and Washington.
Negotiations between the two countries were referenced directly in the announcement of the Strait of Hormuz revenue-sharing accord. Without providing further details, a spokesman for Iran’s Islamic Revolutionary Guard Corps, quoted by state news agency Sepah News, stated that ‘the United States is obstructing this process, causing delays.’
Tehran has repeatedly stated that an agreement on navigation through the Strait does not imply an immediate reopening of the passage. Nevertheless, according to US President Donald Trump, oil continues to flow through the waterway, with approximately ten million barrels having reportedly transited Hormuz on Tuesday.
Source: Diário Económico
Original article: https://www.diarioeconomico.co.mz/?p=534410
