Global oil prices fell on Monday (May 25) as a handful of stranded supertankers finally transited the Strait of Hormuz, signaling a solid thaw in the three-month-old US-Iran conflict as the two sides zeroed in on a comprehensive peace deal.
Brent crude fell 5.5 percent to US$97.90 a barrel in morning trade, hovering around US$97.70 by midday, as the geopolitical risk premium that has fueled energy markets since late February began to decline.
Ship-tracking data from LSEG and Kepler show that a huge volume of LNG and crude is now flowing out of the Gulf via the Iran-mandated transit route, trapping around 20,000 sailors who have escaped the blockade.
The Bahamas-flagged LNG tanker Fuwairit transited the strait on Monday and is due to disembark in Pakistan on Tuesday (May 26) after loading at Qatar’s Ras Laffan port in late March.
A second LNG carrier, the Al Rayyan, was recently spotted outside the strait between Iran and Oman en route to China.
In crude oil markets, the Very Large Crude Carrier (VLCC) Eagle Verona slipped out of the waterway on Saturday (May 23). Chartered by UNIPEC, the ship is loading about 2 million barrels of Basra crude in late February and is expected to reach China’s Ningbo port by June 12.
The Eagle Verona is one of five ships belonging to Malaysia that have been allowed to leave after a direct diplomatic appeal, joining three other VLCCs that departed last week for China and South Korea with 6 million barrels of crude.
Before the conflict, the strait processed about a fifth of the global oil and liquefied natural gas supply, averaging 140 daily routes.
While the physical movement of cargo has provided immediate relief to the market, behind-the-scenes diplomatic negotiations remain complex.
U.S. Secretary of State Marco Rubio said negotiators have “a lot of substance on the table,” though he tempered expectations in New Delhi on Monday, saying talks are “still a work in progress.”
US President Donald Trump described the talks as “progressing well”, but cautioned negotiators against rushing into talks, calling the outcome “a great deal for all or no deal at all”.
Complicating the final step, Trump is pushing regional mediators including Saudi Arabia, Qatar, Egypt, Jordan, Turkey and Pakistan to normalize relations with Israel by signing off. abraham accords As a condition of the peace agreement.
pay attention Ajay Parmar And Andreas Schröder from ICIS discussed increasing volatility in global oil and gas markets as geopolitical tensions disrupt supply chains and reshape energy trade flows.
Parmar highlights how prolonged power outages are weighing on the oil market, while Schroder examines the risks associated with Europe’s growing LNG dependence, Asia’s growing energy influence and infrastructure disruption in major exporters such as Qatar.
Meanwhile, Tehran took steps against the US timeline. Iranian Foreign Ministry spokesman Ismail Bakai confirmed that an agreement had been reached on “a large part of the issues under discussion”, but there was no doubt over an immediate solution.
Even if a permanent treaty is signed this week, energy and shipping analysts warn that a return to pre-war market conditions is highly unlikely in the near term.
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Securities Disclosure: I, Gian Liguid, do not have any direct investment interest in any of the companies mentioned in this article.
