Oil Prices Drop as Tankers Resume Hormuz Transit Following US-Iran Peace Accord

Oil prices extended their decline on Tuesday as more tankers began crossing the Strait of Hormuz, signaling a gradual reopening of the strategic waterway after the US and Iran signed a peace accord to end their three-month conflict. The agreement, separately signed by President Trump and his Iranian counterpart, paves the way for the Strait of Hormuz to reopen, though two months of negotiations lie ahead before a full ceasefire is expected.

The easing of tensions has encouraged some shippers to resume transit through the narrow channel, which had previously been disrupted by the war. Analysts note that a sustained resolution could relieve supply fears and further pressure prices, but traders remain cautious given the uncertain timeline for a complete ceasefire and the unprecedented pressure on the US as the world's top crude exporter to meet global demand.

Meanwhile, ship insurers are bracing for major claims from the conflict, according to Allianz. The prolonged war has led to significant disruptions and damage, and insurers now face substantial payouts. The development highlights the broader economic toll of the conflict, even as diplomatic progress offers hope for stabilization.

Oil markets are also closely watching US inventory data, as traders hedge against divergent outcomes. The recent price drop reflects optimism over the reopening of Hormuz, but uncertainty over the pace of negotiations and potential supply disruptions continues to temper market sentiment.