Commerzbank’s Carsten Fritsch notes that Brent has dropped back below USD 80, briefly touching USD 76.5, after the US allowed Iran to export oil and oil products until at least August 21. Despite some normalization in ship traffic through the Strait of Hormuz, volumes remain far below pre-blockade levels, leading Commerzbank to judge that further downside in oil prices is limited.

Sanctions relief but flows constrained

"Oil prices fell sharply at the start of the week. Brent slipped back below the USD 80 per barrel mark and continues to fall today to USD 76.5, its lowest level since early March."

"Iran has received permission from the US to export oil and oil products, as the US Treasury Department announced yesterday. The sanctions exemptions are initially valid through August 21."

"This figure is still significantly lower than before the blockade, when more than 100 ships, including about 30 oil tankers, crossed the strait every day. Thus, ship traffic has by no means returned to normal."

"We therefore view the further downside potential for oil prices as limited."

"This would keep the LNG supply tight for even longer, which, combined with higher demand in the summer, could lead to rising gas prices."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)