U.S. Secretary of Energy Chris Wright announced a significant shift in oil traffic through the Strait of Hormuz, after a preliminary agreement between the U.S. and Iran, aiming to resolve longstanding nuclear issues and reopen this vital waterway.

Oil Traffic Through Strait Back To Normal, Says Wright

In an interview with ABC News on Sunday, Wright revealed that oil traffic through the Strait of Hormuz has returned to normal even as President Donald Trump threatened Iran with fresh strikes on Sunday.

This follows a preliminary agreement between the U.S. and Iran, which seeks to reopen the critical waterway while addressing unresolved nuclear issues.

"I'm long out of the business of predicting oil or gasoline prices, but they will continue to head down. Flows of oil and natural gas through the straits have already returned to normal, and they will continue that way whatever happens with the negotiations with the Iranians," Wright said.

He also noted increased production from the U.S. and Venezuela, along with global cooperation among energy producers.

Moving Beyond Stalemate

The recent memorandum of understanding between U.S. and Iranian leaders has broken a stalemate in the Strait of Hormuz, a crucial passage for about 20% of the world's oil supply. This agreement led to a waiver of sanctions on Iran's oil industry, enabling it to sell oil globally without major restrictions for the first time in over a decade.

The U.S. Central Command reported that 55 merchant ships transited the strait, transporting over 17 million barrels of oil to global markets. However, maritime intelligence firm Kpler noted a discrepancy, reporting only 20 ships crossing on Saturday.

Strait's Reopening A Critical Development

The reopening of the Strait of Hormuz is a critical development in global energy markets. Previously, maritime traffic had fallen sharply following Iran's announcement of a shutdown. The strait is a strategic chokepoint, carrying nearly 20% of global oil and gas shipments. Any disruptions here have significant implications for energy prices worldwide.

In recent weeks, tensions have been high, with former President Donald Trump warning of potential U.S. tolls in the strait if the peace deal with Iran collapsed. He emphasized the U.S.'s role as a "Guardian Angel" in the region. The current agreement marks a pivotal moment in easing these tensions and stabilizing oil markets.