Oil prices continued to slide to their lowest since before the war with Iran began, as expectations of rising Middle Eastern supply overshadowed demand worries.
Brent crude futures for August dropped $1.06, or 1.44%, to $72.68 a barrel by 06:39 GMT, while U.S. West Texas Intermediate crude fell 76 cents, or 1.08%, to $69.58 a barrel. Both contracts touched their lowest since February 27.
Brent for August traded at a discount to September's $73.59, signaling ample near-term supply. Brent tumbled more than $3 on Wednesday on easing supply fears, while WTI lost nearly $3.
U.S. Energy Secretary Chris Wright told a forum that oil flows through the Strait of Hormuz had nearly returned to pre-war levels, with at least 20 million barrels transiting in the past 24 hours. But he said a full return to normal would take weeks as the strait needs minesweeping.
Rising Middle East supply, along with Iran preparing to ramp up sales after a temporary exemption from U.S. sanctions, has pulled physical crude prices lower worldwide.
New routes
An initial agreement last week to end the U.S.-Israel war with Iran, which began February 28, allowed traffic through the strait to resume. The deal set a 60-day negotiation period to resolve thornier issues, including Iran's nuclear program.
Wright said oil would continue to flow through the strait even if the deal falters, and Iran would not be able to close it again. Tehran has said it plans to impose what it calls a maritime service fee instead of a transit fee, while the U.S. insists the waterway is international and should not be tolled.
Oman opened temporary routes on Wednesday to ease tanker departures from the strait, coordinated with the International Maritime Organization and Omani authorities. On Thursday, Iran's Revolutionary Guards warned against passing through the Strait of Hormuz without permission, saying non-compliant vessels "will be dealt with" and condemning the new routes.
