Crude falls after 19m barrels cross Hormuz Strait

President of the United States, Donald Trump, says a record 19 million barrels of oil flowed out of the Strait of Hormuz on Monday. According to Trump on Tuesday, oil prices are tumbling as a result of the oil flow through Hormuz.

“19 million barrels of oil flowed out of the Hormuz Strait yesterday, an all-time record. Oil prices are tumbling down, and the world is a much safer place,” Trump said in a post on his social media handles.

According to oilprice.com, Brent crude fell to $76.75 per barrel on Tuesday, down from $77 per barrel on Monday.

The decline in oil prices came after US Vice President JD Vance said progress had been made in discussions with Iran and confirmed that the Strait of Hormuz remained open, reducing fears of a major supply shock in the global oil market.

The benchmark had earlier risen as high as $82.30 per barrel over the weekend amid renewed tensions following threats by US President Donald Trump to restart military action against Iran and Tehran’s announcement that it had again closed the strategic waterway.

High-level officials from the US and Iran concluded their first round of talks in Switzerland on Monday, according to mediators. The discussions began on Sunday under a memorandum of understanding reached last week to extend a fragile ceasefire from April for at least another 60 days.

In a move expected to boost oil supply, the US Treasury Department on Monday authorised Iranian oil sales through a general licence that permits the sale of crude oil and petrochemical products of Iranian origin until August 21.

Meanwhile, US Secretary of State Marco Rubio has arrived in Abu Dhabi on Tuesday to meet with Gulf allies. Addressing newsmen, Rubio said no country would be allowed to charge tolls for shipping in the Strait of Hormuz as he sought to reassure US allies in the Gulf that Washington would take a firm line in peace negotiations with Iran.

Rubio is to meet Gulf allies on Tuesday and Wednesday in an attempt to reassure them that the US remains committed to their security and that the 60-day ceasefire deal struck with Iran last week will not embolden Tehran.

Arriving in Abu Dhabi, Rubio said the US would provide for freedom of navigation through the Strait of Hormuz and that no country would be allowed to charge a toll there, which Iran has said it has a right to do.

“It’s an international waterway. No country is allowed to charge tolls or fees on an international waterway. That’s existing international law. That’s the way it is in international waterways all over the world, and that’s the way we expect it’ll be here,” he said.

SOURCE: PUNCH NEWS PAPER