Expectations for reopening of the Hormuz Strait rise, Brent crude continues to decline and hits a new low

⑴ Influenced jointly by intensified US economic pressure on Iran and the reopening negotiations between Iran and Oman regarding the security of the Strait of Hormuz, international oil prices continued their downward trend, with Brent crude falling for the third consecutive day and intraday prices breaking below previous lows. ⑵ According to data from the London Intercontinental Exchange, Brent crude dipped below approximately $88 during volatile trading, as market optimism about the prospects of temporary navigation channel negotiations continued to suppress the geopolitical risk premium. Although some bargain buying provided intraday support, overall downward pressure prevailed. ⑶ US light crude and Mexican export blend both declined, with the former experiencing relatively moderate losses, while the latter tracked the international benchmark downward, reflecting that North American oil grades are slightly less sensitive to Middle Eastern geopolitical developments compared to Brent. ⑷ In the short term, oil price trends will hinge on substantive progress in consultations between Oman and Iran. The market is also assessing the restraining effect of US economic sanctions on Iran's actual export capacity. If diplomatic efforts and sanction pressure combine, oil prices may face further correction risk.