The flow of oil through the Strait of Hormuz has reached its fastest pace since the Iran war began, with approximately 20 million barrels of crude passing through the waterway in a recent three-day period. This surge in traffic occurred despite Iran's previous claims of closing the key shipping chokepoint and continued reports of harassment of passing vessels. Tehran itself contributed to this increased flow, pushing an additional 6 million barrels through the strait.
This renewed activity follows an interim peace deal signed by US President Donald Trump with Iran, which led to an initial resumption of traffic. Prior to this agreement, over 100 oil tankers were reportedly trapped within the Persian Gulf. Following the deal, ships carrying nearly 10 million barrels of oil either exited the strait or were in transit. Notably, vessels from Saudi Arabia, Qatar, and Iran, among others, carrying oil or liquefied natural gas, have been observed using the waterway.
Markets reacted positively to the news of oil flowing, with Brent crude briefly hitting its lowest point since early March and European natural gas prices reaching an almost two-month low. The White House noted the decrease in gasoline prices, stating they were "now BELOW $4 per gallon nationally." Kuwait also announced plans to increase its oil output to over 2 million barrels a day within a week, signaling further market stability and increased supply.
Adding to the easing of tensions, the Trump administration has temporarily relaxed some sanctions on Iranian oil, marking the first time in nearly four decades that American fuelmakers have the option to import crude from Iran. This waiver, issued by the US Treasury under the terms of the interim peace deal, represents a significant departure from long-standing US economic pressure on Tehran. While it remains to be seen how extensively traders and refiners will utilize this new option, it opens a window for Iranian oil to re-enter the global market.
