Global oil prices fell to close to their pre-Iran war level after the United States issued temporary authorization for sales of Iranian oil and refined products in the international market and some ships began moving through the Hormuz Strait. File photo by Brian Kersey/UPI | License Photo
June 25 (UPI) — Oil prices fell to close to their pre-Iran war levels on Thursday, three days after the United States authorized Iranian oil sales on the international market for a 60-day period and U.S. negotiators and regional mediators said good progress had been made in talks to reach a final deal to end the war.
Brent crude, the global benchmark, has fallen by more than $8 a barrel since the start of the week, with the contract for August delivery trading at $72.26 a barrel in mid-morning trade in London. American crude for July delivery was changing hands at $68.19 a barrel, a fall of $7.38 since Monday.
Those prices were at $70.88 and $65.70, respectively, on Feb. 27, the day before the United States and Israel launched their airborne offensive on Iran, which in turn responded by effectively closing the Hormuz Strait, through which around 25% of global oil and gas supplies are exported.
Traffic through the strait has jumped sharply since the United States and Iran signed a 60-day Memorandum of Understanding last week and formal talks over the weekend yielded a maritime “hotline” to avoid incidents or miscommunication.
Brussels-based maritime intelligence provider Kepler told the BBC that more than 170 ships had transited the waterway safely with cargo including crude oil, LNG and fertilizer, among other products, beginning June 18, the day after the MoU was signed.
Jemima Shelley, a senior research analyst at the United Against Nuclear Iran campaign and monitoring group, said that at least 30 of those vessels were tankers loaded with Iranian oil and petrochemicals.
Iranian product started shipping after the U.S. Treasury Department on Monday waived oil sanctions that had been in place for decades, issuing a temporary license allowing U.S. dollar sales of Iranian crude oil, petrochemicals and other oil products through Aug. 21.
As one of the seven key internationally traded commodities, crude oil is priced and brought and sold using the dollar.
The so-called General License X also authorizes previously sanctioned vessels and entities for transact oil business and operations and could also potentially see the United States import oil pumped in Iran for the first time since the 1990s.
Both sides appear to have gone further and faster than required by their MoU, with the U.S. naval blockade of Iran to all intents and purposes lifted and Iranian forces leaving shipping well alone, but maritime traffic in and out of the Persian Gulf remains far lower than the level pre-war, when an average of 138 vessels sailed through the strait each day.
The falling oil costs fed into prices Americans pay at the pump, with the national average for a gallon of regular gasoline on Thursday at $3.92, down from $4 a week ago and just under $5 a gallon a month ago, according to gas price data from the American Automobile Association.
On Wednesday, U.S. President Donald Trump instructed the Justice Department to launch a price-gouging investigation into oil companies, accusing them were not passing on falls in the cost of oil to American motorists.
“The big Oil Companies are not dropping their price at the pump commensurate with the sharply lower prices they are paying for Oil. Those prices are dropping like a rock! I have instructed the DOJ to immediately start looking into this. Gasoline prices better start going down a lot faster than what I’m seeing!” he wrote in a post on his Truth Social platform.
President Donald Trump presents a Medal of Honor to Tom Ripley on behalf of his father, John W. Ripley, during a Medal of Honor award ceremony in the East Room of the White House on Thursday. Photo by Aaron Schwartz/UPI | License Photo
