Brent crude prices ease amid rising covert oil transits

Brent crude prices have eased, with a 3% drop bringing the international standard to $104.44 per barrel. This decline follows a recent surge in prices driven by the ongoing war with Iran. The reduction in oil costs is expected to alleviate some inflationary pressure, though U.S. consumer costs for gasoline and food remained 3.4% higher than a year ago in recent data.

Strategists at Commerzbank suggest that oil prices may gradually return to pre-war levels by mid-next year. This projection is based on the expectation that “dark transits” and covert tanker diversions will restore Gulf supply. They anticipate shipping traffic through the Strait of Hormuz will recover to approximately 8 million barrels per day by the end of the year, potentially rising to 12 million barrels per day next year.

While oil prices may normalize, petroleum products and natural gas are expected to remain tighter and priced above pre-war levels for a longer period. In the U.S., the easing of oil prices has influenced market expectations regarding the Federal Reserve, with investors weighing the potential for interest rate hikes to combat persistent inflation.