Brent hits lowest since before start of Iran war on expectations of smoother oil flows via Hormuz

Brent crude prices fell 3% on Wednesday to the lowest ​level since before the start of the Iran war on signs that more oil tankers are set ‌to move out of the Strait of Hormuz, Reuters reported.

Brent crude futures were down $2.32, or 3.01%, at $74.76 a barrel by 1218 GMT. U.S. West Texas Intermediate slipped by $2.17, or 2.96%, to $71.04.

Brent touched a low of $74.61, its weakest level since February 27, the day before the start of ​U.S.-Israeli strikes on Iran. WTI fell as low as $70.91, the weakest since March 3.

While there are early ​encouraging signs of increased tanker activity, the market is pricing in the broader scenario of ⁠Iranian oil re-entering the global market and the Strait of Hormuz normalising," said Tim Waterer, chief market analyst at ​KCM Trade.

"If sanctions are eased, Iranian production and exports could ramp up relatively quickly given the substantial amount stored ​on tankers — we are likely talking weeks rather than months," Waterer added.

Adding to signs of market weakness, physical crude oil cargoes are selling at discounts across the globe, changing trade flows as markets come under pressure from fast-rising Middle Eastern supply with Iran set to ​boost sales following a temporary reprieve from U.S. sanctions.

Oman said it would keep the Strait of Hormuz open to ​shipping without imposing any tolls and had designated two temporary routes north and south of the existing shipping lane to facilitate the safe ‌passage ⁠of vessels departing the region.