File photo: Oil tanker passing through the Strait of Hormuz, December 21, 2018.
Hamad Mohammed | Reuters
Oil prices widened Wednesday as fears of a military conflict in the Gulf eased and traders pondered the prospects of an Iran-Oman deal to ensure safe shipping routes through the Strait of Hormuz.
international benchmark brent crude oil As of 5:39 a.m. ET, futures for October delivery were down 2.93% to $85.99 per barrel. us West Texas Intermediate Futures In October, it fell 2.78% to $80.07 per barrel.
“US sanctions against Iran were not as severe as expected,” said Dan Coatsworth, head of markets at AJ Bell, adding that falling oil prices had helped calm the market as Treasury yields eased from recent highs.
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BancPro Chief Executive Paolo Brocaldo said the shift away from military action had reduced the perceived risk to Gulf supplies, even if the U.S. did not rule out other interventions.
Additionally, Pakistan reported meaningful progress in talks aimed at easing tensions and restoring navigation in the Strait of Hormuz, Brocardo noted.
Meanwhile, Iran and Oman were discussing a joint interim passage in the Strait of Hormuz and a cleansing mission that would be a precursor to a permanent arrangement to control the waterway.
“Future management of the strait and a durable solution will emerge in due course,” Oman’s foreign minister said in a social media post. “Consultations with regional partners will take place to support peace, cooperation, stability and freedom of navigation.”
—CNBC’s Spencer Kimball contributed to this report.
