More oil flows through Strait of Hormuz push prices down

Despite a fragile interim agreement and conflicting reports about whether the Strait of Hormuz is open or closed, in recent days significantly more oil has passed through the strait than before the agreement. As a result, oil prices have also fallen considerably.On Wednesday, a temporary agreement between the US and Iran was signed. In the days before that, oil prices had already been falling. As of Tuesday afternoon (23 June), a barrel of oil costs $77.28. That is a drop of only 2.1% compared with last Tuesday (16 June), but compared with the Tuesday before that (9 June), the Brent oil price has fallen 15.5%.Since reaching a peak on 29 April at $118.03 per barrel, Brent crude is now 34.5% cheaper. Compared with the start of this year (before the US and Israel airstrikes on Iran of 28 February), however, the current price is still more than a quarter higher.Shipping traffic is nowhere near back to normal, but according to Bloomberg, millions of barrels of oil were shipped through the Strait of Hormuz last weekend. The US has also allowed Iran to sell previously sanctioned oil on the international market for sixty days.The situation is by no means stable. Considerable uncertainty remains over the implementation of the interim agreement and the temporary peace deal is fragile. Much will depend on whether the ceasefire between Israel and Hezbollah in Lebanon holds - a demand from Iran - and whether the US succeeds in reaching agreements with Iran about access to the Strait of Hormuz in the longer term and on preventing the development of nuclear weapons.Diesel priceDiesel costs today (23 June) €148.54 per 100 litres from 4,000 litres (LTO member price). That is a drop of 1.9% compared with a week ago and 27.6% if you look at the peak of early April.Gas priceGas prices have followed a somewhat different pattern, because TTF gas is trading at roughly the same level as a week ago at €41.62 per MWh. The decline in the gas price started on 10 June and since then the price has fallen 16.7%.Compared with the recent peak of 19 March, there is even a decrease of 31.9%. Before 28 February, the price was around €30, meaning the current price remains more than a third above that level.ElectricityThe average daily price for electricity on Epex Spot was relatively high last week, with prices ranging from €84.55 per MWh on 18 June to €175.96 per MWh today.