Crude futures fell in midday trading on Thursday as markets weighed a framework agreement between the US and Iran to end the conflict in the Middle East and reopen the Strait of Hormuz.
Front-month West Texas Intermediate crude futures dropped by 2.1% to $75.17 per barrel, while Brent futures were down 1.7% to $78.13/bbl.
US Central Command said on Thursday that it had lifted the blockade on traffic to and from Iranian ports and coastal areas.
"American forces are not impeding the transit of vessels to or from Iranian ports on the Arabian Gulf and Gulf of Oman," the command said in a social media post on X. "All US military blockade enforcement efforts have ceased."
Additionally, Vice President J D Vance, during a press briefing on Thursday, said that over 12.5 million barrels of oil had passed via the Strait of Hormuz as of Wednesday night, the highest since the start of the conflict.
President Trump, on Thursday, on a social media post, refuted reports that the US would make a $300 billion payment to Iran, labeling the reports as "fake news," saying Washington was seeing "success" and lower oil prices.
On Wednesday, Trump and Iranian President Masoud Pezeshkian electronically signed a memorandum of understanding to develop a permanent peace deal to end the Middle East conflict.
The framework agreement sees the two sides commit to further talks over the next 60 days, offers Iran major financial relief, including the ability to immediately resume oil sales, and the reopening of Hormuz.
Four Saudi Arabian supertankers that had been idling in the Indian Ocean for weeks reportedly moved toward the Gulf of Oman, signaling that producers are preparing for a gradual resumption of crude shipments through the Strait.
The vessels, owned by Saudi Arabia's Bahri, made sharp course adjustments early Thursday, according to media reports. Three other Bahri-operated tankers that had been stranded in the Persian Gulf for months also exited the strategic waterway earlier in the day.
Saxo Bank strategists said that an estimated 100 million barrels of crude and refined products are already loaded on tankers and waiting to leave the Gulf, while regional producers are taking steps to restart shut-in production.
Kpler data on Tuesday showed 118 laden tankers were trapped in the Persian Gulf.
Meanwhile, US commercial crude oil inventories decreased by 8.3 million barrels to 418.2 mmbbls in the week ended June 12, the Energy Information Administration said in its weekly report on Wednesday. The EIA said crude inventories are now about 6% below the five-year average for this time of year.
On the demand side, OPEC projected that oil demand will reach 113.3 million barrels per day in 2030 and 124.1 million b/d by 2050, up from 105.1 million barrels in 2025. The producer cartel's forecast contrasts with that of the International Energy Agency, which expects global supply to surge by 8 million b/d and demand to rise by just 2 million b/d.