Oil Hits Three-Month Low as Brent Nears $77
Brent slid toward $77 a barrel, its lowest in nearly three months, after Washington granted Iran a 60-day license to sell oil and traffic through the Strait of Hormuz recovered.
- Brent fell to about $77 a barrel, its lowest in nearly three months, while WTI traded around $73-74.
- The decline is tied to a 60-day license Washington granted Iran to sell oil on the world market.
- Traffic through the Strait of Hormuz is recovering: Iran exported more than 30 million barrels in a single week.
- For Serbia, cheaper crude means a smaller import bill, but uncertainty over Iran's nuclear program remains.
Brent crude slid toward $77 a barrel on Tuesday, its lowest in nearly three months, while US WTI traded in a range of $73 to $74. These are the global benchmarks that price almost every crude shipment, including the oil that reaches Serbia’s refinery in Pancevo.
The trigger was not a sudden jump in output but a political move. Washington granted Tehran a 60-day license to sell oil on the world market, returning barrels that had spent months outside legal trade flows to the supply side. The market reacted quickly: when more crude is on offer and demand does not shift overnight, the price falls. The spread between Brent and WTI stayed in its usual range, showing this was a market-wide reaction rather than a local anomaly.
Why does the Strait of Hormuz matter again?
The second reason for the lower price is logistics. Traffic through the Strait of Hormuz, which carries a significant share of the world’s oil exports, is recovering. Iran exported more than 30 million barrels in a single week, while Kuwait and the United Arab Emirates found alternative routes for their energy shipments. As the risk of a supply disruption eases, the so-called risk premium, the slice traders had priced in over fears of a blockade, comes off the price.
For an import-dependent country like Serbia, cheaper crude works on two fronts. A lower entry price for oil reduces the import bill and creates room for some relief at the pump, since retail fuel prices are partly built from the exchange quote for crude plus margins, excise duties and tax. Cheaper crude does not automatically mean cheaper fuel by month’s end, because the state takes a fixed share through excise and VAT, but it eases pressure on importers and on the exchange rate, since oil is paid for in dollars.
Is the price drop here to stay or just a pause?
The answer depends on two variables that cannot be modeled precisely. The first is Iranian supply: the license runs for 60 days, and what follows is not defined. The second is geopolitics. Iranian media denied claims that Tehran would let nuclear inspectors return, leaving uncertainty over the nuclear program open. Any fresh tension over the Strait of Hormuz or sanctions could restore the risk premium overnight and push prices back up.
For now the market reads the situation as relief on the supply side. By sliding toward $77, Brent returned to spring levels, meaning the entire spike driven by earlier Middle East tensions has been erased. Historically, declines tied to political licenses and diplomatic deals are rarely permanent: a single incident in the strait is enough to send prices higher again. The next pivot point is the expiry of the Iranian license and how OPEC members respond to a lower price.
Are you tracking fuel prices at the pump and expecting cheaper crude to reach your tank, or do you think the state will keep the margin for itself through excise duties?
