FX.co ★ Crude Suffers Worst Quarterly Fall Since 2020

Crude oil hovered around $70.70 per barrel on Tuesday, capping a roughly 30% decline in the second quarter—its steepest quarterly drop since 2020. The slide comes amid a sharp increase in supply, as tanker traffic through the Strait of Hormuz has accelerated following progress toward a peace agreement that freed up oil previously bottlenecked in the Persian Gulf.

Additional pressure on prices stems from US sanction waivers granted to Iran, which have brought extra barrels into a market already struggling to absorb significant supply reroutings and workarounds. Diplomacy continues as delegations from Washington and Tehran head to Doha for talks aimed at ending the four-month conflict, although Iran has ruled out direct negotiations with the US.

At the same time, Iran is holding firm on its position regarding control of maritime traffic through the strait. Iranian officials have signaled an interest in jointly regulating this key chokepoint with Oman, but emphasized that Tehran is prepared to move ahead with its own regulatory framework if necessary, even as crude flows through the waterway continue to pick up.