Oil prices have steadied for the second consecutive day, with the US benchmark West Texas Intermediate (WTI) holding around $70 per barrel. This stability comes despite recent skirmishes between the US and Iran and ongoing uncertainty regarding peace talks, as investors appear optimistic about a negotiated end to the conflict. This price point represents a significant decline, with WTI set to close the month with nearly a 20% drop, following a 15% decrease in May, returning to pre-war levels.
Traffic through the Strait of Hormuz, a critical chokepoint for global oil supplies, has picked up after a recent downturn. On Monday, approximately 24 commodity ships, including oil and LNG tankers, transited the strait in both directions. This trend continued into Tuesday, with a supertanker and several smaller vessels reappearing in the Persian Gulf. This rebound in shipping, which had dropped significantly after an initial attack on a container ship, suggests increasing confidence among shipowners to navigate the waterway, with the oil tankers alone capable of carrying around 11 million barrels of crude.
Key movements include the inbound transit of the Nisalah, a very large crude tanker controlled by Saudi Arabia's Bahri, currently off Ras Tanura. Additionally, a 2026-built, Marshall Islands-flagged Suezmax, owned by a Greek operator, made its first entry into the Persian Gulf since late February, now idling off Ras Al-Khaimah. South Korea's Sinokor also had three supertankers enter the Persian Gulf empty, openly signaling their movements along Oman’s coast, with a fourth heading to Iraq’s Basrah. The quicker-than-expected recovery of Hormuz traffic has led Morgan Stanley to lower its Brent crude forecast to around $75 a barrel, citing ample supply and softer demand, and projecting a sizable global oil surplus in 2027.
