West Texas Intermediate (WTI) oil price depreciates after registering modest gains in the previous day, trading around $81.30 per barrel during the Asian hours on Thursday. Crude oil prices decline amid signs of diplomatic progress in the Middle East.
Iran and Oman reached an agreement over each country‘s share of the Strait of Hormuz’s waters and related revenues, although Tehran cautioned that reopening the crucial waterway would require more than an agreement with Oman.
Meanwhile, US President Donald Trump said 10 million barrels of oil had passed through Hormuz on Tuesday, while reiterating claims that mines in the waterway had been cleared.
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Oil prices have also come under pressure this week after fresh US economic sanctions on Iran proved less aggressive than markets had feared, with the White House so far sparing Irans trading partners from tougher measures.
Oil prices pared early losses after official data showed US crude inventories rose by less than expected last week. According to the Energy Information Administration (EIA), crude inventories increased by 95,000 barrels to 428.9 million barrels for the week ended August 21. This was significantly lower than the 597,000-barrel build analysts had forecasted in a Reuters poll.
Compounding market tightness, supply disruptions and geopolitical tensions mounted in Eastern Europe. Russias fourth-largest oil refinery and second-largest gasoline producer, NORSI, suspended crude processing on Wednesday following a Ukrainian drone strike. Concurrently, Bloomberg News reported that Russia is considering escalating its ballistic missile strikes on Kyiv, including targets in the city center and critical infrastructure elsewhere, after Kremlin sources indicated that peace negotiation efforts have hit a dead end.