Oil Prices Ease as Iran's First Oil Tanker Exits Blockaded Gulf Zone

Crude oil prices continued to ease on Wednesday amid reports of Iran’s first oil tanker in two-month to have exited the zone in the Gulf blockaded by the US Navy. Global crude oil benchmark Brent Crude declined almost 1 percent to $78 per barrel from Tuesday’s levels. American crude benchmark WTI Crude also fell 1 percent to $75 per barrel mark during the Asian trade hours. Today’s decline in prices is, however, comparatively moderate than Monday when there was a decline of over 5 percent right after the announcement of the US-Iran peace deal and opening of the Strait of Hormuz. Still the retreat in prices is faster than many experts had projected. The strait, which was closed since the start of the war in late February, used to give way to about 20 percent of the world’s oil supply from the Gulf region. Iran had effectively blocked the waterway soon after the country was attacked by Israel and the US on February 28. Now that the US and Iran have agreed to stop the war and negotiate a final peace agreement during the 60-day window, the Strait of Hormuz is open for commercial vessels to pass through. According to reports, an Iranian oil tanker has managed to exit the zone in the Gulf blockaded by the US Navy. This is Tehran;s first crude oil export in about two months. Earlier it was reported that three Iranian oil tankers and two cargo ships had passed through the Strait of Hormuz after the US lifted its naval blockade. On Monday, the Indian government had said that an LNG vessel, named Disha, entered the Strait. However, traders are cautious of the developments in Lebanon where Isarel has continued its operation against Hezbollah. According to a report by Aljazeera, Iran has accused Israel of violating the truce in Lebanon 84 times since the memorandum of understanding was agreed to between Tehran and the US. Iran has warned of a “harsh response” if attacks continue. Israel has already said that its operation against the Hezbollah in Lebanon will continue despite the peace truce of its war ally the US. Any adverse development in the region may again lead to a surge in oil prices.