Oil Prices Dip, But Still No Agreement to Reopen Hormuz

Global shares mostly rose on June 2, after U.S. President Donald Trump said Israel and Hezbollah had agreed to dial back fighting.

However, oil prices are still well above prewar levels, with Brent crude slipping $1.49 to $93.49 a barrel. The levels are still well above the roughly $70 level they were at before the war.

Much hinges on whether the United States and Iran will reach an agreement to reopen the Strait of Hormuz, allowing deliveries of oil to resume from the Persian Gulf and easing the upward pressure on inflation. Japan imports almost all its oil, although the effects on prices of gas and other products have been relatively contained by the release of the nation’s reserves so far.

Crude shortages have already forced refiners across Asia and Europe to aggressively reduce runs, resulting in a squeeze on fuels that power economies, including gasoline, diesel, jet fuel, LPG, and naphtha.