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(RTTNews) - Extending two consecutive sessions of losses, crude oil prices have edged lower on Thursday amid reports indicating Iran is readying new rules for vessels crossing the Strait of Hormuz while the regime is also reviewing a peace plan offered by the U.S. to end the gulf war.
WTI Crude Oil for June month delivery was last seen trading down by $0.32 (or 0.34%) at $94.76 per barrel.
The Middle East war between the U.S.-Israel forces against Iran that began on February 28 entered day number 69 today. Since the conflict began, Iran has effectively shut the Strait of Hormuz and crippled oil and energy tanker movements across the waterway.
After announcing a ceasefire, U.S. President Donald Trump enforced a blockade on all ships traveling to and from Iranian ports.
The dual blockade effectively shut vessels loaded with oil and energy from moving out of the Hormuz strait and the resultant disruption sent crude oil prices through the roof.
On Monday, Trump started an initiative to free up the movement of stranded ships in the region with U.S. Navy's guidance and escort but paused the program stating that the peace talks were going on very well.
Reports from Axios indicated that Iran was currently reviewing a one-page Memorandum of Understanding from the U.S. containing 14 crucial points aiming to halt the war and reopen the strait immediately and arrive at a framework for future discussions over the next 30-day period.
Trump cautioned that if Iran fails to strike a deal, U.S. may restart bombing Iran.
With output-and-supply disruption concerns diminishing, oil prices earlier plunged heavily.
However, citing sources from Lloyds List and after studying the related documents, CNN reported today that Iran has laid out fresh rules for vessels attempting to move across the Strait of Hormuz in a bid to compel all shippers to comply with Iran's protocol or face attacks.
The proposed plan enlisted in a documented entitled "Vessel Information Declaration" was issued by the recently created Persian Gulf Strait Authority of Iran. The PGSA document consists of more than 40 questions for shippers to answer. Details on whether Iran would charge a fee from ships is unclear at this stage.
These moves, seen as Iran's attempt to exert its control over the strait, have renewed concerns of an escalation in the Middle East even though Trump remarked yesterday that the U.S.-Iran war would end quickly.
Yesterday, through social media app Telegram, Iran's Supreme Leader Mojtaba Khamenei called for a new regional order under a strong Iran.
Experts are cautiously optimistic of a U.S.-Iran peace deal as they are uncertain on how Iran would reconcile with the U.S.
According to a Bloomberg survey, crude oil production from the Organization of Petroleum Exporting Countries fell to a new 36-year low last month as a result of the export blockage in the Persian Gulf. The output declined by 420,000 barrels per day to 20.55 MM bpd in April, the lowest since 1990.
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