Oil prices edged higher as ongoing peace talks between the US and Iran instilled some confidence in the market, although concerns over the fragile ceasefire persisted. U.S. West Texas Intermediate (WTI) crude for August delivery settled up $1.52 at $70.75, while August Brent crude settled up $1.16 at $73.15. The market had initially seen volatility, selling off to a low of $69.32 after reports surfaced of both countries accusing each other of breaking the ceasefire, before rallying later in the day.
Shipping traffic through the Strait of Hormuz, a critical chokepoint for global oil supplies, showed signs of recovery after recent attacks on commercial vessels. On Monday, approximately 24 commodity ships, including oil tankers and LNG carriers, transited the strait in both directions, according to Kpler data. This marks the first significant increase since hostilities caused many operators to halt or delay transits, with total traffic previously having been 90% lower than pre-war levels of over 130 vessels daily.
Entering the Persian Gulf were several supertankers, indicating growing confidence among shipowners and regional producers. Three supertankers operated by South Korea's Sinokor sailed in empty, signaling intentions to load oil. Additionally, the Nisalah, a very large crude tanker controlled by the National Shipping Co. of Saudi Arabia (Bahri), made an inbound transit. A 2026-built, Marshall Islands-flagged Suezmax owned by a Greek operator also entered the Gulf, suggesting a return of activity after a period of caution. The US had conducted fresh strikes on Iran following ship attacks, leading to an agreement to halt hostilities for peace talks.
Despite the recent uptick, total traffic through the strait remains around 70% below pre-war levels, prior to the conflict erupting in late February. However, this recovery is seen as crucial for regional producers to restart oil output. Notably, Saudi Arabia, the UAE, Qatar, and Iran have continued loading oil and LNG onto vessels at their Persian Gulf ports amidst the easing tensions. Iran's loadings from Kharg Island have also resumed, bolstered by a US waiver on Iranian oil sanctions until August 21.
