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US Oil Update: Crude Slips as Markets Focus on Hormuz Flows After US-Iran Deal

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Crude oil futures settled lower in after-hours trading on Tuesday as markets assessed crude flows through the Strait of Hormuz following signs of progress in US-Iran peace negotiations.

Front-month West Texas Intermediate crude futures were down by 0.7% to $73.37 per barrel, while Brent futures dropped by 0.9% to $77.15/bbl.

ING strategists said the gradual increase in flows through the Strait of Hormuz continues to weigh on the market, while positive signals from US-Iran talks in Switzerland have weighed on sentiment.

US Secretary of State Marco Rubio said on Tuesday that Iran would not be able to levy tolls in the strategic waterway as part of any final agreement with Washington, adding that such an arrangement would violate international law.

"No country is allowed to charge tolls or fees on an international waterway," Secretary Rubio said.

On Tuesday, President Trump said in a social media post that 19 million barrels of oil flowed out of the Strait on Monday, while pointing to falling oil prices.

Kpler strategists said that the US-Iran peace deal, which triggered a temporary easing of sanctions, is expected to provide relief from shipping disruptions in the Strait, but the market remains far from a return to normal trade conditions.

The analysts said the immediate increase in vessel movements reflects the unwinding of a massive backlog rather than a surge in fresh supply.

The latest data show that more commercial vessels are transiting the strategic waterway with their satellite signals switched on, with Kpler reporting that confirmed crossings rose from 32 vessels between June 12-14 to 93 between June 19-21.

However, Oman and Iran agreed on Tuesday to press ahead with discussions on the future administration of navigation in the Strait of Hormuz.

The two countries agreed to establish a joint working group between their foreign ministries to continue discussions on the future framework governing navigation via the Hormuz.

Pressuring crude prices, the US on Monday authorized the sale of Iranian oil and fuels as part of an agreement to end the Middle East conflict.

The US Treasury Department issued a 60-day license that allows Iran to sell its energy products through Aug. 21 and make payments in US dollars. The waiver also allows for the importation of Iranian crude oil and other petrochemical and petroleum products into the US.

Marine Traffic said in a post on X that the recovery in shipping flow was supported by recent diplomatic developments and the temporary general license, which has helped ease immediate compliance uncertainty around approved Hormuz transits until Aug. 21.

Saxo Bank strategists said the temporary license is expected to facilitate the export of some of the estimated 30 million barrels that left Iranian ports last week.

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US Oil Update: Futures Drop After US Authorizes Iranian Crude Sales

Crude oil futures fell in after-hours trading on Monday after the US issued a temporary license authorizing the sale of Iranian crude and petroleum products, easing supply concerns and signaling significant progress in negotiations to end the conflict in the Middle East.Front-month West Texas Intermediate crude futures dropped by 1.8% to $75.15 per barrel, while Brent futures were down 3.2% to $78.28/bbl.Soojin Kim, a research analyst at MUFG, said the prospect of strong supply, combined with softer Chinese demand, has weighed on prices and reduced the war-related risk premium.The US Treasury Department's Office of Foreign Assets Control issued "General License X" on Monday, granting a 60-day waiver that permits the production, delivery, and sale of Iranian-origin crude, petroleum products, and petrochemicals through Aug. 21.The waiver also allows for the importation of Iranian crude oil and other petrochemical and petroleum products into the US."In line with the ongoing productive talks in Switzerland, Iran has committed to free and open transit in the Strait of Hormuz and to permit International Atomic Energy Agency (IAEA) inspectors into their country," US Treasury Secretary Scott Bessent said in a post on X.TankerTrackers said Iran has exported 36 million barrels of crude oil since June 15, and about an equal amount remains afloat in Iran.Meanwhile, the US and Iran on Monday made progress during peace talks aimed at reaching a final deal within 60 days, including an agreement to end hostilities in Lebanon.Vice President J D Vance said that talks between the US and Iran have made "great progress."Earlier on Monday, Iranian Foreign Minister Abbas Araghchi said the mediators, Qatar and Pakistan, had managed to ease some of the tensions over Lebanon."Tireless Pakistani and Qatari mediation has delivered major progress to end Lebanon War," Araghchi said in a social media post on X. "Oil and petrochem exports are waived, blockade lifted, some frozen assets released, and major reconstruction & development plan launched for Iran."On the supply front, the latest shipping data show an uptick in oil and liquefied natural gas tanker traffic through the Strait of Hormuz over the 19-21 June period, though overall flows remain below pre-conflict levels.Kpler said a total of 71 confirmed vessel transits via the strategic waterway, with activity peaking at 35 crossings on Saturday.However, tanker traffic via the Strait remains about 15% below pre-conflict levels, EBW Analytics said, adding that alternative supply routes and weakening Asian demand are helping loosen balances.

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Middle East Supply Losses Top 1.2 Billion Barrels as Recovery Takes Shape, Kpler Says

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Oil & Energy

LNG Trade Remains Resilient as Hormuz Traffic Gradually Recovers, Vortexa Says

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