President Donald Trump touts a record 19 million barrels of oil flowing through the Strait of Hormuz, sending oil prices plummeting.
Tanker traffic passing through The Strait of Hormuz It began amid talks between the US and Iran aimed at ending the war, which has sent oil prices falling as more supply enters the market.
Both sides agreed to open the key oil transportation route during negotiations after the US instituted a naval blockade and Iran laid sea mines that prevented the ship from moving through the narrow zone.
The central channel of the Strait of Hormuz is yet to be cleared of Iranian mines, causing ships to navigate through the northern channel in Iranian waters or the southern channel in Omani waters. The US Navy oversees navigation through the southern channel, and Iran issued a request last week for ships to use the northern channel in its waters.
Shipping rose over the weekend to the highest level since the conflict began in late February, with 109 ships passing through the Strait of Hormuz from Saturday to Monday, according to Kpler, a company that tracks global shipping.
OIL PRICES DIFFER AS TRUMP IRAN MAY REOPEN STRAIT OF HORMUZ
Shipping through the Strait of Hormuz is increasing amid US-Iran talks, although it remains below pre-war levels amid the threat of mines. (Reuters/Hamad I Mohammed)
The president Donald Trump said Tuesday on his social media site The Truth, “19 Million Barrels of Oil flowed out of the Strait of Hormuz yesterday, an all-time RECORD. Oil prices are falling, and the World is a much safer place!!!”
Despite the increase in ship traffic, it remains lower than the more than 130 ships a day that crossed the spoit on a typical day before the start of the conflict, The New York Times reported.
There is still a backlog of hundreds of ships waiting to pass through the port, according to the International Maritime Organization.
OIL PRICES CONTINUED TO LOWEST LEVELS SINCE BEGINNING OF MARCH AFTER TRUMP SAID IRAN COSTS.
President Donald Trump has voiced an increase in oil exports amid talks with Iran. (Getty Images)
The Joint Maritime Information Center (JMIC), a US-led international maritime security organization based in Bahrain, downgraded the region’s threat level to moderate on June 18 after the US and Iran he agreed to open the waterway during a 60-day negotiation window.
However, it noted that there are confirmed mines in the waterway and suggested ships use the southern route near Oman as it has been cleared of mines.
“Sailors should be advised of the presence of mines and expect the presence of naval vessels as the demining operation continues,” JMIC said in its announcement. “Seafarers should expect congestion on shipping lanes and possible VHF from naval forces to support free navigation.”
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Tanker traffic in the Strait of Hormuz decreased significantly during the Iran war. (Giuseppe Cacace/AFP via Getty Images)
The level of oil passing through the Strait of Hormuz has decreased worldwide oil priceswhich rose to trade above $100 a barrel at times during the first two months of the dispute.
Brent crude oil prices, the global oil benchmark, were at $75 a barrel on Tuesday after falling about 0.3% on the day and more than 4.5% over the past five days.
They also declined the benchmark US crude, West Texas Intermediate, which was around $73 a barrel on Tuesday after falling about 0.8% on the day and about 7.7% over the past five trading days.
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An increase in oil supplies from the Middle East and the return of tanker traffic in the Strait of Hormuz also caused a change in North Sea crude prices, with Forties crude prices from the North Sea trading at their lowest level in two years on Monday. Bloomberg reported.
