Oil Sinks to $88, Then Spikes as Iran Claims Control of Hormuz

Oil Prices Bounce After Iran Establishes New Persian Gulf Strait Authority

Oil prices continue to navigate high volatility as negotiations between the U.S. government and the Iranian regime to terminate the current conflict unfold.

On Wednesday morning, reports of a possible termination of “Operation Epic Fury” derived from an agreement centered on a memorandum of understanding prompted oil prices to drop substantially, with West Texas Intermediate (WTI) futures reaching as low as $88.66 and their Brent equivalents for July delivery dropping to $96.75.

On Truth Social, Trump stressed that “assuming Iran agrees to give what has been agreed to, which is, perhaps, a big assumption, the already legendary Epic Fury will be at an end, and the highly effective Blockade will allow the Hormuz Strait to be OPEN TO ALL, including Iran.”

Nonetheless, pessimistic reports about the feasibility of a conflict termination appeared mid-morning, as Iran established the “Persian Gulf Strait Authority” to oversee maritime transit passage through the Strait of Hormuz.

The authority’s new website hints at the collection of fees for this passage and the establishment of rules issued by the current Iranian government, a point that differs from Washington’s conditions to end the conflict and the maritime blockade against Iran.

Regarding the authority’s operation, the Iranian regime thanked ship captains and operators for their “cooperation in transiting the Strait of Hormuz in accordance with Iranian regulations,” suggesting that the entity is already coordinating safe passage for vessels.

“With the end of threats from aggressors and under new procedures, safe and sustainable passage through the Strait will be possible,” the Islamic Revolutionary Guard Corps (IRGC) Navy Command declared.

Oil prices bounced after these events. WTI futures with June delivery rose to over $96, and Brent futures with July delivery reached over $103 per barrel.