An international agreement has been reached to allow vessels to pass through the Strait of Hormuz without paying tolls, clearing the path for a surge in oil tanker traffic through the strategic passage.
US crude fell US$2.50 per barrel to just over US$70.50/bbl, while international Brent crude dropped US$3 per barrel to just over US$74/bbl. The reopening is expected to cause hundreds of ships and cargoes to move, flooding refiners with product as demand indicators weaken.
Over the past 24 hours, 13 crude or product tankers exited the strait (1 with transponders off), while 12 entered for new loads (2 with transponders off). Those transit volumes are expected to change soon following the reopening agreement.
Other commodity markets also moved sharply. Urea prices have fallen back below pre-war levels. Sulphur prices, however, are remaining unusually high despite the reopening agreement, with Chinese sulphur inventories now at a decade low.
Gold fell US$152 per ounce to US$3978/oz, while silver dropped US$5.50 per ounce (down 9%) to just under US$56.50/oz.