The price of Brent crude oil fell to around 73 dollars per barrel, effectively rolling back to the level it was before the latest escalation of the conflict in the Middle East. American WTI oil dropped below 70 dollars per barrel, writes The Moscow Times.
Illustrative photo. Photo: "Nasha Niva"
Main reasons for the fall in prices:
- resumption of shipping through the Strait of Hormuz;
- reduction of risks of oil supply disruptions from the region;
- expectations of growth in Iranian oil exports;
- forecasts regarding an excess of supply on the world market.
According to the International Maritime Organization, thanks to cooperation with Oman, Iran, the US, and representatives of the shipping industry, safe routes have been organized for more than a thousand vessels that were blocked in the Persian Gulf.
Against this background, Russian oil is also getting cheaper. An additional factor was the re-imposition of American sanctions after the US did not extend the license for certain operations with Russian oil.
Analysts also note that many countries have already purchased the necessary volumes of raw materials in advance and are now waiting for even greater price reductions. According to the International Energy Agency's forecast, in 2027, global oil supply could exceed demand by more than 5 million barrels per day, creating a significant surplus in the market.
And if Iran can quickly increase exports after possible agreements with the US, the pressure on prices could intensify even further.
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