Crude oil extended losses to around $74 per barrel on Monday, trading near its lowest level since early March, after reports that the US and Iran agreed on a roadmap aimed at achieving a final peace agreement within 60 days. At the same time, the US Treasury Department authorized the production, delivery, and sale of Iranian oil and petroleum products for a 60-day period, reinforcing expectations of a quicker supply recovery.
Shipping activity through the Strait of Hormuz has also picked up, with data showing that millions of barrels continued to move through the key chokepoint over the weekend. Iran has raised visible oil shipments via Hormuz to their highest level since the conflict began and has lowered prices on cargoes sold to China.
Other Gulf producers are preparing to increase output as well, with Kuwait lifting force majeure declarations and Abu Dhabi’s ADNOC resuming supply operations. A full reopening of the Strait of Hormuz could release roughly 80 million barrels onto the market, further weighing on prices at a time when demand remains subdued.
