GLOBAL oil prices hovered around US$75 per barrel on Thursday after three straight days of declines, as markets reacted to reports that Iran and Oman had reached an agreement on a temporary shipping route through the Strait of Hormuz, raising expectations of improved energy exports from the Gulf.
According to reports, a joint statement outlining the arrangement is in its final drafting stage, with the proposed shipping corridor expected to remain in operation for between two and four months. Tehran, however, stressed that the agreement should not be interpreted as a full reopening of the strategically important waterway.
The development reinforced expectations that diplomatic efforts between Iran and the United States are progressing, although investors remained cautious over whether any agreement would deliver lasting stability in the region.
Geopolitical risks continued to cloud sentiment after Iran-backed Houthi forces in Yemen claimed responsibility for targeting a Saudi oil tanker in the Gulf of Aden and warned that other vessels transiting the Red Sea could also be attacked, highlighting persistent threats to regional shipping despite ongoing negotiations.
Meanwhile, the US dollar weakened sharply, providing some support for commodity prices.
The US Dollar Index (DXY) slipped below 99.8, its lowest level in seven weeks, extending losses triggered by Japanese currency intervention and continued foreign selling of long-term US dollar-denominated fixed-income assets.
The recent weakness followed coordinated intervention by the US Treasury and Japanese authorities, who were estimated to have purchased around ¥88 billion to support the Japanese currency, with part of the operation involving sales of US dollars.
The dollar also remained under pressure following the US Federal Reserve's decision to leave interest rates unchanged. During the post-meeting press conference, Federal Reserve Chairman Kevin Warsh stopped short of signalling that higher inflation would necessarily warrant another rate increase, prompting investors to reduce expectations of a rate hike next month.
Those expectations were further tempered by declining energy prices and a weaker-than-expected ADP private employment report, both of which suggested easing inflationary pressures and a softening labour market.
From a technical perspective, the Dollar Index has now broken below its July uptrend and entered August under mounting downward pressure. While its broader annual uptrend remains intact, analysts say attention is shifting to key support levels ahead of Friday's closely watched US non-farm payrolls report, which is expected to provide fresh direction for Federal Reserve policy and global financial markets. - August 6, 2026
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