SOUTH-EAST ASIA (Agencies): US President Donald Trump on Monday said that ships carrying oil are beginning to move out of the Strait of Hormuz after the US and Iran declared that they have reached an agreement to end the war, Anadolu Ajansi reported.
"Ships are starting to move, many loaded up with Oil, out of the Strait of Hormuz. They are going along the Southern 'Highway,' which is totally safe, secure, and pristine," Trump wrote on his Truth Social platform.
"There are other areas of travel, also!!!" he added.
Pakistani Prime Minister Shehbaz Sharif, whose country led mediation between Washington and Tehran, announced early Monday that the US and Iran had reached an agreement following intensive negotiations, with both sides declaring an immediate and permanent end to military operations across all fronts, including in Lebanon.
The deal is set to be signed in Switzerland on Friday.
Meanwhile, Reuters said that oil prices slid to fresh three-month lows on Tuesday as markets weighed prospects for a resumption of supplies through the Strait of Hormuz alongside weaker physical demand and scant details on a preliminary deal to end the Iran war.
Brent crude futures were down $1.70, or 2%, at $81.47 a barrel, by 1034 GMT. The benchmark fell to $81.00 per barrel, the lowest since March 4.
U.S. West Texas Intermediate was down $1.89, or 2.3%, at $78.86 a barrel, after dropping to $78.41, the lowest since March 10.
Oil prices had already dropped nearly 5% on Monday to their lowest close since March 4 after U.S. President Donald Trump said a memorandum of understanding had been signed to end the U.S.-Israeli war with Iran, though full details have not been released.
Iranian Foreign Minister Abbas Araqchi said on Tuesday that Iran and the U.S. would start a new round of talks in Switzerland on Friday to reach a final agreement after the start of an interim deal.
INVESTORS EYE STRAIT REOPENING
The conflict led to the closure of the Strait of Hormuz, which typically carries about one-fifth of global oil supplies.
So far, few tankers have crossed the strait since the framework agreement was announced, though ships have been quietly moving barrels along Oman's coast for weeks, sailing "dark" with U.S. navy support. Shippers are awaiting reassurance on safety to cross the strait, including the clearing of mines.
The U.S. military has overseen scores of secretive ship-to-ship oil transfers to keep Gulf energy exports flowing, using aerial and water drones as well as helicopters in an operation to guide convoys to awaiting tankers.
Shippers are awaiting reassurance on safety to cross the strait, including the clearing of mines, which could delay a return to normal shipping traffic by weeks.
Early indications suggest the U.S.-Iran deal would reopen the blockaded strait and extend a ceasefire for 60 days, buying time for negotiations on issues including Iran's nuclear programme.
Some analysts expect flows through the strait to resume soon, adding to downward pressure from already soft physical markets.
Goldman Sachs lowered its fourth-quarter Brent forecast to $80 a barrel from $90 and cut its 2027 average estimate to $75 from $80, saying it now assumes Gulf exports return to pre-war levels by the end of July rather than late August.
A range of indicators has pointed to weakening physical oil markets in recent weeks, Morgan Stanley analysts said in a client note.
China's crude imports slumped 29% in May to their lowest in eight years, extending a sharp decline for the world's largest importer, with shipments of Saudi crude also expected to fall in July.
"We did have some weaker-than-expected Chinese data as well, suggesting perhaps that demand from the world's second-largest economy and one of the top oil consumer nations could be weakening at a time when oil supply is expected to rise again with the easing of restrictions on Iran," said Fawad Razaqzada, market analyst at Forex.com.
With details still unclear and a permanent truce yet to be secured, analysts say volatility risks remain.
