Brent crude fell to $83.55 a barrel after news of a framework deal between the US and Iran, shifting the morgan stanley oil price forecast as traders priced in a possible reopening of the Strait of Hormuz to commercial shipping. For fuel buyers, that points to less upward pressure from the conflict that had pushed oil, diesel and jet fuel higher.
Trump Pushes Oil Flows
Donald Trump said the agreement would include reopening the Strait of Hormuz to commercial shipping, then later said: "Ships are starting to move" and "loaded up with oil, out of the Strait of Hormuz". He also called the waterway "totally safe, secure and pristine" in a later post.
That reaction followed months in which the Strait of Hormuz had been closed to most shipping traffic since 28 February, leaving hundreds of vessels stuck in the gulf. The route normally carries about a fifth of the world’s oil and LNG supplies, so any shift in access quickly feeds into supply expectations and then into the barrel price.
Two Vessels Exit Since Sunday
Only two vessels with active location trackers had exited the waterway since Sunday, according to MarineTraffic, even after the framework deal was announced. Verify said ship-tracking data still appeared to show low traffic levels in the strait, a sign that traders were not yet treating the agreement as a full return to normal shipping.
Hapag-Lloyd said it has four ships stuck in the strait and hopes to get them out over the weekend once the deal is signed and any remaining mines are cleared. Maersk said it was too early to assess how the agreement will affect logistics and that there was no change to its operations in the region for now.
Brent’s $120 Peak To $70
Brent crude peaked at around $120 a barrel during the conflict, compared with just below $70 a barrel before hostilities broke out. The effective halt to traffic increased oil prices and had a knock-on effect on petrol, diesel and jet fuel costs, which is why the move back to $83.55 matters even before shipping fully normalizes.
Neil Shearing said it remained to be seen whether the latest deal "represents a fragile truce or a durable settlement" and said it would likely "take some time for oil flows through the Strait to return to pre-war levels". If those flows stay below normal, the price relief from the deal can narrow quickly; if the route reopens, the pressure on the barrel price should ease further.
