Oil is officially making its way out of the Strait of Hormuz after US President Donald Trump signed an interim peace deal with Iran. This development has led to an immediate market reaction, with oil futures and retail gasoline prices dropping. Brent crude briefly touched its lowest point since early March, and European natural gas prices reached an almost two-month low. The White House has confirmed that "Oil is flowing and gas prices have begun tumbling down, now BELOW $4 per gallon nationally."
At least four Saudi oil supertankers, owned by the Saudi Arabian tanker giant Bahri, that had been idling in the Indian Ocean for weeks, are now moving towards the Gulf of Oman, signaling an imminent resumption of flows through the Strait. Concurrently, three other Bahri tankers, the Shaden, Jaham, and Awtad, which had been stranded in the Persian Gulf for months, successfully exited the Strait of Hormuz earlier on Thursday. In addition to Saudi vessels, ships carrying Qatari liquefied natural gas and a Chinese fuel tanker have also exited the waterway.
Over 31 supertankers, collectively capable of transporting approximately 62 million barrels of crude, were trapped inside the Persian Gulf. These vessels are now poised to re-enter global shipping lanes, creating an impending surge of oil into Asian markets. Kuwait has also begun to ramp up its oil production, with plans to exceed 2 million barrels per day within a week, further contributing to the increased supply.
The US has ended its blockade of the Strait of Hormuz, with Vice President JD Vance stating that a 60-day period has begun for negotiations on the contentious details of the memorandum of understanding signed between the US and Iran. This interim peace deal and the subsequent opening of the Strait mark a significant shift, with nearly 10 million barrels of oil already having either emerged from or currently sailing through the strait, indicating the strongest flow rate since the conflict began.
