Crude Oil Prices Fall Below Pre-War Levels To $72 Per Barrel As Gulf Supplies Overflow Market

Crude oil prices fell below pre-war levels on Thursday as traders shed fears of disruption even as the United States and Iran continued their 60-day peace negotiations.

The global benchmark Brent crude fell over 1.60% to trade near the $72.40 per barrel mark.

In February, a day before the US and Israel attacked Iran, Brent crude had closed at $72.48 per barrel.

US benchmark West Texas Intermediate (WTI) crude also declined 1.22% to $69.48 per barrel during Asian trading hours on Thursday.

The latest decline in oil prices came as the United States and Iran continued to make progress on the diplomatic front and supplies through the Gulf region improved at a faster pace.

According to a report by Financial Times, traders were willing to pay more for oil to be delivered later in the year, a sign that the market is oversupplied in the short term.

The negotiations have already resulted in the United States agreeing to waive sanctions on Iran’s oil industry for a period of 60 days while both sides continue discussions on a broader agreement.

On Wednesday, 31 tankers left the Gulf. This was 50% higher than the previous day, according to ship-tracking data from Windward.

As conditions in the Strait of Hormuz improve, the United Nations’ International Maritime Organization (IMO) has started efforts to evacuate more than 11,000 sailors stranded in the region.

However, threats to the peace talks continue to emanate from Israel’s military operation in Lebanon.

The US and Iran have agreed to devise a mechanism to bring the conflict in Lebanon to a halt.

Meanwhile, the US has reiterated its position against any plans by Iran to impose a fee to facilitate trade through the Strait of Hormuz.

US Secretary of State Marco Rubio has promised to protect Gulf allies’ interests as he arrives in Bahrain ahead of a meeting of the Gulf Cooperation Council.