Oil Falls
Oil prices fall after Vice President JD Vance says more than 12 million barrels exit Strait of Hormuz
Vice President JD Vance told reporters that 12.5 million barrels passed through the Strait of Hormuz overnight.
President Donald Trump signed a deal Wednesday with his Iranian counterpart Masoud Pezeshkian to end the war in the Middle East.
Vance said the Iranians have not fired on any commercial ships so far.
The U.S. has also allowed ships to pass through its blockade, he said.
Oil prices fell Thursday after Vice President JD Vance said tankers with more than 12 million barrels crossed the Strait of Hormuz overnight. "That is a high since the beginning of the conflict," Vance told reporters at a White House press briefing.
Around 14 million barrels per day of oil and 6 million bpd of refined products passed through Hormuz before the war.
Brent crude futures, the international benchmark, fell 2.7% to $77.40 a barrel by 11:36 a.m.
ET.
West Texas Intermediate futures fell 2.96% to $74.52 per barrel.
President Donald Trump signed a deal Wednesday with his Iranian counterpart Masoud Pezeshkian to end the war in the Middle East.
Under the deal, Iran must allow ships to transit Hormuz without paying tolls for 60 days, while the U.S. is supposed to lift its naval blockade. "The Iranians, for the second night in a row, did not shoot at any ships in the Strait of Hormuz," Vance told reporters. "So far they are honoring their end of the commitment." "On the blockade, CENTCOM allowed north of a dozen ships to go through our naval blockade, and so we're also honoring our end of the early part of the agreement," the vice president said.
The IEA expects a lasting resolution to the conflict will result in significantly higher supply volumes and spark a major oil overhang next year.
Global supply is now expected to drop by 3.9 million barrels per day on average in 2026 to 102.4 mbd, before recovering to 110.3 mb/d next year, according to its latest monthly oil market report. "Our first look at 2027 balances shows a significant overhang emerging next year," the IEA added.
While lower oil prices may reduce chances of energy prices leading to a broader inflation problem, this is not "an all-clear," according to a report by New York Life Investment Management. "Oil remains above pre-conflict levels, shipping normalization will take time, and inventories and strategic reserves still need to be replenished," the report noted. —CNBC's Hugh Leask contributed to the report.