(RTTNews) – Adding to the two previous sessions of losses, crude oil prices have inched lower on Wednesday, shedding the gains made earlier in the session as investors analyzed reports of Iran and Oman closing in on an agreement to establish a temporary transit corridor through the Strait of Hormuz against conflicting claims by the U.S. and Iran over control of the narrow seaway.
WTI Crude Oil for October month delivery was last seen trading down by $0.22 (or 0.27%) at $82.14 per barrel.
On Tuesday, citing regional officials, CNN reported that Iran and Oman are set to jointly create an interim route for shipping through the Strait of Hormuz.
The foreign ministries of both the nations stated that they discussed a “phased framework” for a joint project to allow shipping temporarily.
Oman’s Foreign Minister Badr bin Hamad Al Busaidi stated that the future management of the strait and a permanent solution will follow in due course.
Later, Iran’s Deputy Foreign Minister Kazem Gharibabadi stated that Iran and Oman have reached an agreement to establish a temporary seven-mile-wide transit route through the Strait of Hormuz. Gharibabadi added that the full entry route and a portion of the exit route of this temporary channel will run through Iranian territorial waters.
Emphasizing once again that Iran is in full control of the Strait of Hormuz, Gharibabadi demanded the U.S. fully implement the commitments it made under the June 17 Memorandum of Understanding (which it later violated) for Iran to reopen of the Strait of Hormuz.
Gharibabadi denied the U.S. claims of clearing all the sea mines in the crucial waterway and challenged the U.S. to send any vessel through it.
Quoting the spokesperson for Iran’s Islamic Revolutionary Guards Corps Hossein Moheb, AFP reported that both nations have also agreed on sharing the revenues.
While U.S. President Donald Trump warned that any Iranian vessel placing new mines would be destroyed, Gharibabadi warned that any mine-sweeping vessel entering the strait would be targeted.
In an interview with radio host Glenn Beck aired today, Trump claimed again that the U.S. got rid of all mines in the strait and that the strait is functioning with a lot of oil pouring out.
The U.S.-Iran conflict has moved to a new phase after the U.S. announced a long list of economic measures against Iran.
Yesterday, U.S. Treasury Secretary Scott Bessent announced, “Operation Economic Outcast,” aimed at truncating all channels of funding to Iran.
The U.S. sanctioned nearly 60 entities in several countries doing business with Iran and warned that any nation attempting to offer any form of lifeline to Iran will undergo a similar fate.
In an interview with Al Jazeera, Trump stated that both the military and economic measures against Iran are effective.
Stating that he has no time schedule on when negotiations may resume, Trump added that the U.S. is not in any hurry to hold negotiations with Iran.
On Monday, Pakistan’s Army Chief Field Marshal Syed Asim Munir and Interior Minister Mohsin Naqvi held daylong diplomatic talks in Iran, meeting several Iranian leaders. Later, Naqvi stated that significant progress was made and the meeting concluded on a highly positive note.
According to the American Petroleum Institute, crude oil inventories increased by 4,200,000 barrels for the week ending August 21, strongly above market expectations for a 1,900,000-barrel increase and reversing a 328,000-barrel decline of the previous week.
Commercial crude oil inventories excluding the Strategic Petroleum Reserve have declined by just over 45,000,000 barrels over the past 19 weeks, while inventories are up 5,800,000 barrels year-to-date.
According to the U.S. Energy Information Administration, for the week ending August 21, crude inventories increased by 95,000 barrels to 428,900,000 barrels compared to expectations for a 600,000-barrel rise. At the Cushing’s Oklahoma Delivery Hub, inventories increased by 1,176,000 barrels.
For the same period, while gasoline and distillate inventories decreased by 2,536,000 barrels and 2,228,000 barrels respectively, heating oil inventories increased by 27,000 barrels.
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