Iran and Oman indicated that they were approaching the conclusion of arrangements for safe navigation in the Strait of Hormuz. After the announcement, international oil prices continued to fall, while the market was concerned about whether the United States would extend sanctions against Iran ' s trading partners.
Channel flight arrangements are approaching formation.
On Tuesday, the Foreign Ministers discussed a proposed framework, including the establishment of a temporary joint channel in the Strait of Hormuz and the joint advancement of mine clearance projects. The Strait of Hormuz is one of the most important transportation routes for crude oil in the world, through which about one fifth of the global flow of crude oil usually passed before the outbreak of the Iranian conflict.
Preliminary data show that only 5 cargo ships pass through the Strait on Tuesday, which is significantly below the average of 15 in the past 10 days. While traffic remains low, the market views the joint statement as a sign of de-escalation.
The United States has not expanded secondary sanctions
Another factor in the recent depression of oil prices is the fact that the United States has not immediately laid down the larger sub-sanctions. U.S. Treasury Secretary Besent had previously proposed to increase economic pressure on the Iranian regime and its “consponsors” and trading partners, and had targeted 60 individuals, entities and vessels.
However, the United States has not yet imposed even larger sub-sanctions on other countries, particularly against Chinese financial institutions suspected of assisting Iran in the oil trade. Becent indicated that the United States wished to give the parties concerned a buffer period, but stressed that action could move forward quickly.
China's statement will be counterproductive.
China bought about 90 per cent of Iranian oil. In response to the possible expansion of economic pressure by the United States, Beijing indicated that if the United States were to upgrade its measures against countries trading with Tehran, China would take the necessary steps to defend its interests.
The market is also concerned about whether the situation in the Middle East continues to cool. It was reported that the United States had begun to return diplomats to the Gulf States, which was interpreted by some investors as a further escalation of the current situation in Washington.
The Brent crude oil price fell by $90 per barrel after the news, indicating that traders were reassessing the risk of disruption in the Strait of Hormuz and the actual impact of the United States follow-up sanctions on the supply side.