Oil pared early losses on Wednesday after Iran's Revolutionary Guard said Tehran and Oman had agreed to share revenue from the Strait of Hormuz. A senior Iranian source told Reuters the accord is not yet finalized, while separate U.S. data showed crude inventories rose as fuel stocks fell.
Brent crude futures traded about 1% lower to $87.74 a barrel, and U.S. West Texas Intermediate dropped 0.7% to $81.74 a barrel, recovering from steeper losses earlier in the session. Oil had fallen more than 3% earlier Wednesday as the U.S. leaned on economic pressure against Iran rather than military strikes, easing fears for now that the adversaries will return to war. Prices are down more than 5% for the week.
IRGC cites revenue-sharing deal, Iranian source says talks continue
A Revolutionary Guard spokesman told Iran's Tasnim news agency that Iran and Oman had agreed to share revenue generated from Hormuz, with the two countries also sharing control of the strait, which is just 21 miles wide at its narrowest point. IRGC spokesperson Hossein Mohebbi said "we have reached results that are acceptable to both sides."
But a senior Iranian source told Reuters that an agreement with Oman over the Strait of Hormuz has not been finalized, with talks continuing on the details. The strait handled one-fifth of global oil and liquefied natural gas shipments before the war began on February 28, and most shipping has since been shut down as Tehran and Washington each impose separate blockades.
Washington's pressure campaign continues
The Revolutionary Guard said Washington must accept the Iran-Oman agreement for Hormuz to reopen, and accused the U.S. of trying to obstruct the deal. President Donald Trump had threatened to bomb Oman earlier this month over Muscat's negotiations with Tehran. Trump has claimed the U.S. controls Hormuz, and U.S. Central Command told CNBC last week that 660 million barrels of crude oil have exited the strait since May under military protection. Iran separately blacklisted 45 ships on Sunday in an effort to stop ship-to-ship transfers used to evade its blockade.
Crude inventories rise as fuel stocks decline
Separately, the Energy Information Administration reported that U.S. crude stockpiles climbed by 95,000 barrels to 428.9 million barrels in the week ended August 21, short of analyst expectations for a 597,000-barrel increase. Gasoline stocks, however, fell by 2.5 million barrels to 206.8 million barrels, exceeding forecasts for a 0.7 million-barrel decline, while distillate stockpiles dropped 2.2 million barrels to 103.4 million barrels, against predictions of a 1.6 million-barrel drop.
Sources: CNBC, Investing.com, Investing.com
Trading involves risk.
Risk Disclaimer
