Oil Falls Below $75 as Hormuz Traffic Recovers After US Waiver
U.S. crude oil prices fell below $75 per barrel on Monday for the first time since March 2026, as the Treasury Department issued a 60-day sanctions waiver on Iranian oil purchases and maritime traffic through the Strait of Hormuz showed signs of recovery. The twin developments mark the most concrete evidence yet of de-escalation between Washington and Tehran following months of conflict.
West Texas Intermediate crude fell 2.7% to approximately $74 per barrel, while international benchmark Brent crude dropped 4% to about $77 per barrel — both touching their lowest levels since the Iran conflict began in early 2026. Prices remain above their prewar baselines of roughly $62 and $68 per barrel, respectively, according to NBC News.
The Sanctions Waiver
Treasury Secretary Scott Bessent announced the 60-day general license on Monday, authorizing the production, delivery, and sale of Iranian-origin crude oil, petrochemical products, and petroleum products through August 21, 2026. The waiver also permits the importation of Iranian oil into the United States when necessary to complete sale or delivery.
“Iran has committed to free and open transit in the Strait of Hormuz and to permit International Atomic Energy Agency (IAEA) inspectors into their country,” Bessent said in a statement published on social media. “As part of the framework, Treasury has issued a temporary 60-day general license authorizing the production, delivery and sale of Iranian oil.”
The waiver is a key provision of the Islamabad Memorandum of Understanding (MoU) signed on June 17 by Presidents Donald Trump and Masoud Pezeshkian, mediated by Pakistan. The 14-point framework agreement also includes commitments from Iran to permit IAEA nuclear inspectors and maintain free transit through the Strait of Hormuz, as Al Jazeera reported.
Strait of Hormuz Traffic Recovers
Shipping data from the tracking group Kpler showed a daily average of 23 vessel transits through the Strait of Hormuz from Friday through Sunday — 17 on Sunday, 35 on Saturday, and 19 on Friday. While this represents a significant increase from the single-digit crossings recorded at the height of the conflict in April, it remains far below the prewar baseline of approximately 130 vessels per day.
“While daily transits remain below the 125 crossings prior to the Iran hostilities, the trend is positive,” shipping firm Clarksons said in an analysis.
The recovery follows the U.S. Navy’s decision to end its blockade of Iran and Tehran’s agreement to allow ships to cross the strait for 60 days without paying tolls. Most vessels continue using routes designated by Iran, with some turning off transponders while transiting, according to Kpler data cited by Press TV.
In a notable sign of returning normalcy, five Iranian supertankers loaded with oil were observed departing the region on Friday, switching on transponders after having gone dark during the war. Four Qatari-operated LNG tankers also entered the Gulf through the strait on Monday.
Broader Diplomatic Progress
The oil price decline and traffic recovery coincided with the conclusion of the first round of high-level U.S.-Iran talks in Switzerland, where mediators Pakistan and Qatar announced agreement on a “roadmap towards reaching a final deal within 60 days.” U.S. Vice President JD Vance, who led the American delegation, voiced optimism about the trajectory of negotiations.
“We laid a very good foundation for a successful final deal,” Vance told reporters, as Al Jazeera reported. The talks established a high-level committee to provide political oversight, a communication line for the Strait of Hormuz to avoid incidents, and a “de-confliction cell” aimed at ending military operations in Lebanon.
Iranian Foreign Minister Abbas Araqchi confirmed that restrictions on Iran’s oil and petrochemical exports had been waived, the blockade lifted, and some frozen assets released, describing these as key Iranian conditions that had been met.
Fragile Recovery and Ongoing Risks
Despite the positive momentum, analysts caution that the recovery remains fragile. On Saturday, Iran threatened to close the strait again over ongoing Israeli attacks in Lebanon, underscoring how quickly the situation could reverse. The U.S. maintained that the strait was never closed for a second time, tracking 55 merchant ships carrying more than 17 million barrels of oil on Saturday.
The broader economic implications are significant. Lower oil prices could reduce inflationary pressures globally, particularly for transportation and manufacturing costs. Data from the commodities group Argus showed that the price of urea, a key fertilizer ingredient, has fallen 50% from its peak in April, offering potential relief for global food production costs.
What to Watch
Markets and policymakers will be watching several key questions in the weeks ahead: whether Hormuz traffic can return to prewar levels within the 60-day window, whether Iran follows through on allowing IAEA nuclear inspections, and whether the U.S.-Iran framework can survive continued Israeli military operations in Lebanon. The next phase of technical negotiations, set to continue in Switzerland, will test whether the political will demonstrated in the MoU can translate into a lasting comprehensive agreement.”