After the agreement between America and Iran on opening the important waterway, a very relieving news has come for India. An Indian LNG tanker stuck in the Persian Gulf for the last three months has now started moving towards the Strait of Hormuz.
The Strait of Hormuz acts as a lifeline for oil and gas trade around the world. When geopolitical tensions increased in late February, the supply chain came to a complete standstill. Now President Donald Trump has indicated that an agreement to open the route will be formally signed by this Friday. This news is a lifeline for all those importing countries who were constantly struggling with supply shortage. As soon as the news of the deal hit the market, the movement on ships that had been stalled for months intensified. Ships anchored from the Gulf of Oman to the coast of Dubai are now preparing to cross this important crossing.
Indian ship Disha raised hopes
The best thing from India’s point of view in this whole incident is the moving forward of the ship named ‘Disha’. According to Bloomberg’s ship-tracking data, this Indian ship is north of the United Arab Emirates (UAE) and is now rapidly approaching Oman. The ship is operating under long-term charter to an Indian government importing company. It had loaded a large consignment of gas from Qatar’s Ras Laffan facility around March 1, but due to tensions it had to stop in the Gulf.
Oil and gas prices fell in the global market
The market always bets on future expectations. The possibility of resumption of LNG traffic via the Strait of Hormuz has eased supply concerns that had kept gas prices skyrocketing in Europe and Asia since March. Its effect was clearly visible as soon as Asian markets opened on Monday. European natural gas prices fell by 5.8 percent in early trading. This softening in the energy market also brought down Brent crude oil, which recorded a huge fall of more than 4 percent.
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