WTI futures drop near three-week lows on expectations the Strait of Hormuz will reopen soon, easing supply concerns.
West Texas Intermediate crude futures fell 0.45% to around $74 in early European trading, approaching a three-week low of $73.51. The decline follows expectations that the Strait of Hormuz, a critical chokepoint for nearly 20% of global oil supply, may reopen imminently.
Iran and Oman are reportedly close to finalizing a framework to manage navigation through the strait, with a senior Gulf official citing a 50% chance of an agreement by Friday. While Iran proposes a joint toll system, global leaders, including the U.S., have opposed recognizing Iranian authority over the passage.
Technical indicators reinforce the bearish outlook, with WTI trading below its 20-day exponential moving average at $79.24, signaling potential further downside.