An agreement between Iran and Oman on a shipping route through the Strait of Hormuz weighs on oil prices amid cautious optimism over supply stability.
West Texas Intermediate crude trades at $74.20 per barrel, extending a four-day decline as Iran and Oman finalize a joint shipping route through the Strait of Hormuz. The deal, expected to last two to four months, has eased concerns over energy flow disruptions from the Middle East, though Tehran insists it does not fully reopen the waterway.
Oil prices had faced pressure from expectations of improved supply stability, despite lingering skepticism over the durability of regional agreements. U.S. officials suggest broader negotiations with Iran are progressing, though investors remain wary of geopolitical risks. Recent Houthi attacks on a Saudi tanker in the Gulf of Aden highlight persistent threats to shipping.
Market sentiment remains guarded, with analysts noting the agreement’s fragility. TD Securities strategists attribute recent weakness to shifting market psychology rather than fundamental supply changes.