Oil prices return to near pre-war levels as Strait of Hormuz shipping rises

Secretary of State Marco Rubio warned Thursday that allowing Iranian sanctions on ships passing through the Strait of Hormuz would set a precedent for other waterways, risking “total chaos.”

“International waterways do not belong to any country. This is a basic principle in the world today, without which the world would be in chaos,” he told the Gulf Cooperation Council meeting in Bahrain.

“If we actually accept that you can charge a fee to use an international waterway because it’s close to your place, that will spread like wildfire around the world.”

Rubio, on his first trip to the region since the US and Iran signed a deal to end the conflict in the Middle East, said the US wanted a peace deal but not “at any price”.

“Although we want an agreement, we do not want an agreement of any price,” he said. “We want a good deal, we want a real deal, we want a verifiable deal, and we want an enforceable deal.”

Brent crude, the international standard, fell 3.8% to $73.87 a barrel. It has been trading below $80 in recent days but still above the roughly $70 barrel it traded at in late February before the war broke out.

US crude prices fell 3.9% to $70.34 a barrel. Early Thursday, Brent was down 1.3% at $72.90, while benchmark US crude lost 1.4% to $69.37.

The drop in prices comes as shipping across the Strait of Hormuz resumed slowly last week under a US-Iran memorandum of understanding.

Secretary of State Marco Rubio was in Bahrain on Thursday after promising Gulf allies that Washington would protect their interests as it tries to hammer out a final deal to end the war with Iran.

During his visit to Kuwait City, Rubio said that Washington will be on the same page as the Gulf states as it engages with Iran in terms of resolving the conflict once and for all.

“We will be fully aligned with our partners in the Gulf,” he said, adding that the United States “will engage them in discussions about all the decisions that are made regarding this negotiation.”

Rubio is expected to attend the Gulf Cooperation Council meeting in Bahrain on Thursday after sitting down with the leaders of Kuwait and the United Arab Emirates on Wednesday.

The original US-Iran deal, which set out a 60-day negotiation process aimed at reaching a long-term agreement, did not address the Gulf states’ long-standing concerns about Iran’s missile program.

But Rubio insisted that Washington “will not do anything that undermines the security of our partners”.

The Senate on Wednesday late Wednesday rejected a measure aimed at limiting President Trump’s powers to fight Iran, in a victory for the president and the Senate GOP leadership as they sought to quell congressional dissatisfaction with the Trump administration’s Iran strategy.

This process proposal failed in 50 votes out of 47, two Republicans – Sens Susan Collins and Lisa Murkowski – voted for the continuation of the decision of Sen. Democratic Alliance Tim Kaine, who is in line with most Democrats. Republican Sen. Rand Paul voted yes, while Democratic Sen. John Fetterman voted no.

Just one day earlier, four Republicans voted yes on a separate resolution passed by the House to limit Mr. Trump’s war powers. Trump, which allows us to pass a little. Those four GOP lawmakers voted to advance Kaine’s resolution in a previous procedural vote last month — the first time an Iran war power resolution has moved forward in the Senate after seven failed attempts.

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Israel’s military said Thursday that a soldier was killed the day before in southern Lebanon, where clashes with Iran-backed Hezbollah have been reported despite a ceasefire.

Master Sergeant Basil Sweid, 32, who is the driver, “collapsed while working,” the military said.

A spokesman told AFP that he was killed when his car overturned.

The military said 37 soldiers and one contractor had been killed in southern Lebanon since fighting broke out with Hezbollah in early March.