Oil Plunges After Iran Drafts U.S. MOU To Reopen Strait Of Hormuz In 1 Month

Oil prices plunged after Iranian state TV reported a draft initial, unofficial framework for a memorandum of understanding (MOU) with the U.S. that would include Iran restoring commercial shipping through the Strait of Hormuz in 1 month, according to Reuters and the New York Post.

“Oil prices fell Wednesday after Secretary of State Marco Rubio said the U”

CNBC

The New York Post said the fall was a 5.6% drop and that Wednesday’s price for West Texas Intermediate was the lowest in more than a month, after crude futures had been at more than $107 a barrel just over a week earlier.

CNBC

CNBC reported West Texas Intermediate futures tumbled more than 5% to close at $88.68 per barrel and Brent settled at $94.29 per barrel after Secretary of State Marco Rubio said the U.S. will give talks with Iran "every chance to succeed."

CNBC also quoted Rubio saying, "The bottom line is that we prefer the negotiated diplomatic route and we're going to give it every chance to succeed," and it said Trump told the White House Cabinet meeting that he will not allow Iran to control the Strait of Hormuz as part of a deal.

Oil rose again after limited American strikes on Iran, with Al Sharq Al-Awsat saying the U.S. Central Command described the actions as "defensive strikes" in southern Iran to protect American personnel.

Al Sharq Al-Awsat reported that the U.S. Central Command said American forces struck missile-launching sites and boats attempting to lay mines after Iranian media reported explosions around the strait.

Folha de S.Paulo

The same report said Brent crude climbed toward $100 a barrel after falling more than 7% on Monday, while West Texas Intermediate was near $93, and it added that negotiations were expected to continue for several more days.

Al Jazeera net said oil prices fell more than 4% on Wednesday after reports of possible progress toward a framework agreement between Iran and the United States that would restore commercial shipping through the Strait of Hormuz to pre-war levels within a month, while the White House denied the accuracy of the reports and said the memorandum being circulated "is completely fabricated."

As the war in Iran reached three months on Thursday (the 28th), Folha de S.Paulo said the final status of the Strait of Hormuz after ceasefire negotiations between Iran and the United States was one of the most awaited points by the international community.

“Crude futures were at more than $107 a barrel just over a week ago”

New York Post

Folha de S.Paulo quoted Nitish Monebhurrun saying, "Both the blockade by Iran and the blockade by the U.S. are illegal," and it said he pointed to the Montego Bay Convention as the "sacred text" of international maritime law.

The same article said Tehran has floated the idea of making tolls permanent and that this would violate at least 40 years of legal precedents guaranteeing freedom of navigation, while it also quoted Douglas Guilfoyle saying, "blocking ports is a legitimate tool of naval warfare."

Folha de S.Paulo warned that for Monebhurrun, any arrangement after the end of the conflict that maintains tolls or complete Iranian control over Hormuz would be "only the ratification of an illegality," and it added Guilfoyle’s concern that "international law itself seems to be under attack."