Oil Prices Fall 3% After Ships Pass Through Strait of Hormuz
Oil prices fell about 3% on Monday after ships began passing through the Strait of Hormuz, the world's most crucial energy shipping route. This decline occurred despite US allies rejecting President Donald Trump's call to help lift the blockade of the strait, and as the head of the International Energy Agency (IEA) hinted that reserve releases could be increased to curb the surge in energy costs stemming from the Iran war.
At the close of trading, Brent fell $2.93 (-2.8%) to $100.21 per barrel, while WTI fell even more sharply by $5.21 (-5.3%) to $93.50 per barrel. Analysts believe that WTI's deeper decline than Brent was due to several factors: near-record US oil production, additional supply from Venezuelan imports, the planned release of oil from the Strategic Petroleum Reserve (SPR), and technical action ahead of the expiration of the front-month WTI April contract.
Monday's decline followed a sharp rally earlier. On Friday, Brent closed at its highest level since August 2022 and WTI at its highest level since July 2022, sending both benchmarks up nearly 40% since the US and Israeli attacks on Iran on February 28. The rally was primarily driven by concerns about supply disruptions, as tanker traffic in Hormuz nearly halted.
On the political front, Trump reiterated his call for other countries to help secure and open Hormuz, but complained about a lack of enthusiasm from US partners. In Europe, EU Foreign Policy Chief Kaja Kallas stated that EU foreign ministers currently have “no appetite” for expanding the EU’s naval mission in the Middle East to Hormuz—a sign that international coalition support has not yet solidified.
Source : Newsmaker.id
