Oil slid lower on cautious Hormuz restart as maritime bottlenecks and depleted reserves establish price floor

Crude benchmarks extended their systemic sell-off on Tuesday, with both contracts touching near four-month intraday lows before settling roughly 1% lower.

The international Brent contract shed 82 cents (1.1%) to close at $77.08 a barrel, while US WTI dropped 65 cents (0.9%) to $73.21.

The persistent downward pressure remains tethered to the physical resumption of crude flows through the Strait of Hormuz, facilitated by a 60-day US sanctions waiver and a verified lull in broader Levant hostilities.

Logistical bottlenecks continue to throttle export acceleration. While 19 million barrels exited the waterway Monday and marine data confirmed three supertankers transited Tuesday, daily volumes remain strictly capped by Revolutionary Guard transit permits.

Geopolitical friction remains high; US Secretary of State Marco Rubio explicitly rejected Tehran's proposed waterway tolls, while uncleared naval mines, debris, and a UN-led evacuation of 11,000 seafarers prevent an unconditional ramp-up.

Supply responses remain fragmented. Iraq boosted southern field output to 2.1 million bpd to service tanker queues, yet regional baseloads remain weighed by record-low Saudi exports.

Aggressive unwinding of speculative long positions is now meeting fundamental support; preliminary data shows continued US inventory draws, leaving the Strategic Petroleum Reserve at June 1983-lows and establishing a firm structural floor beneath current spot levels.

Written by: Aiman Haikal