Sectors
Oil Falls to Pre-War Lows as Trapped Tankers Begin Leaving the Persian Gulf
Oil prices continued to fall early on Wednesday, dropping for a fourth-straight session as tankers trapped in the Persian Gulf due to the U.S-Iran war continue to move through the Strait of Hormuz, while the drop in U.S. inventories eased last week.West Texas Intermediate crude oil for August delivery was last seen down 2.9% to US$71.06 per barrel, the lowest since the war began on Feb. 28, while August Brent oil was down 3% to US$74.78.The International Marine Organization on Tuesday launched an evacuation plan for ships that have been trapped in the Gulf in cooperation with Iran, Oman and other Persian Gulf coastal states region, the U.S. and the maritime industry, with ships being notified of their place in the queue.As well, sanctions on Iran have been lifted by the US, freeing up full production from OPEC's number three oil producer and reassuring traders that the largest-ever supply shock has come to an end as output from the Persian Gulf nations that supplied a fifth of the world's energy demand return to market."The market is increasingly pricing a steady return of stranded supply following one of the most severe disruptions in recent history. UAE exports have already recovered to around 85% of pre-war levels, adding to expectations of improving supply availability in the weeks ahead," Saxo Bank noted.The fall in U.S. oil inventories is also slowing, with the American Petroleum Institute on Tuesday reporting stocks dipped by just 0.77-million barrels last week, down from a fall of 8.33-million barrels a week prior and the tenth-straight weekly drop. The Energy Information Administration will release official inventory data later on Wednesday morning.
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