Oil prices fall after Iran steps up truce efforts, US says Hormuz mines cleared

Oil prices fell on Friday after the US military said it had cleared all the mines in the Strait of Hormuz and Iran said it would draw up a list of demands for the waterway’s full reopening. Crude also shed some of its value a day after Qatar's top diplomat met with senior officials in Tehran in a bid to reopen negotiations with the US to end the six-month-old war.

What happened: Brent crude, the international benchmark for oil, was at $87.58 a barrel as of 9:13 a.m. EDT on Friday, down 1.08% from the previous day. Earlier on Friday, it had fallen as low as $87.36.

“We have successfully cleared sea mines in the strait's international shipping lanes that were laid months ago by Iran's Islamic Revolutionary Guard Corps,” Commander Adm. Brad Cooper said in a video posted Thursday on X. “Internationally recognized transit routes in the strait are free of Iranian sea mines.”

The previous day, in an interview with conservative radio host Glenn Beck, US President Donald Trump reiterated his claim that the strait was open again. However, shipping traffic remained subdued, with Kpler data showing that only five vessels transited the waterway on Thursday.

Mediators have stepped up efforts to reopen the Strait of Hormuz. In a post on X following his visit to Tehran on Thursday, Qatar's prime minister, Sheikh Mohammed bin Abdulrahman Al Thani, said he had stressed to Iranian officials “the importance of respecting freedom of navigation in the Strait of Hormuz in accordance with international law.”

Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, separately told Al Manar TV that Tehran was preparing a list of conditions for fully reopening the strait. He said Iran and Oman had agreed on a shipping corridor running through both countries’ territorial waters, while vessels could use a designated central channel similar to the prewar route if Washington meets Tehran’s conditions, which have not yet been detailed.

Why it matters: The Strait of Hormuz, through which around a fifth of the world’s oil and liquefied natural gas shipments passed before the war, has been all but blocked since the conflict began on Feb. 28.

Vessels have been cautious about transiting the waterway due to attacks by Iran’s IRGC, followed by a US blockade on Iranian ports.

Negotiations to permanently end the war have failed, with the US disengaging from talks and instead adopting a stance of maximum economic pressure and imposing additional sanctions on Iran. Washington has also threatened secondary sanctions on countries that trade with Iran. Tehran has condemned the sanctions and indicated that it will not back down in the face of the restrictions.

Although a 14-point interim ceasefire agreement was reached in June, it has failed to hold, with attacks continuing on ships in the Strait of Hormuz and the Red Sea by Yemen’s Iran-backed Houthi rebels.

Qatar and Pakistan helped broker the interim truce memorandum of understanding, which Trump declared “over” on July 8 after tensions flared.

Know more: Uncertainty over Venezuela’s future in OPEC also weighed on the market. Caracas is considering withdrawing from the organization, Bloomberg reported Friday, citing people familiar with the matter.

Its departure would be a major blow to the Organization of the Petroleum Exporting Countries, given that Venezuela has the world’s largest proven oil reserves, estimated at 303 billion barrels.

OPEC says part of its role is to maintain stability in the oil market and a Venezuelan exit would give it far less sway over oil prices. The cartel, made up of 11 member countries, currently controls between 30% and 35% of global oil supplies.