By Tala Ramadan, David Morgan and Patricia Zengerle
DUBAI/WASHINGTON, June 25 (Reuters) – Oil prices fell to pre-war levels on Thursday as the United States said flows through the Strait of Hormuz were nearing normal and its top diplomat completed a Gulf tour aimed at shoring up support for a preliminary Iran deal.
U.S. Energy Secretary Chris Wright said on Wednesday shipments through the strait were approaching levels seen before the U.S. and Israel launched strikes on Iran on February 28, with at least 20 million barrels exiting the strait in the previous 24 hours.
During the conflict, Iran took effective control of the vital chokepoint, disrupting oil flows and rattling global energy markets and the wider economy.
Despite the recovery in traffic, Iran signalled it would continue to assert control. Its Revolutionary Guards on Thursday warned vessels to stick to routes through the strait designated by Tehran, rejecting newly announced shipping routes not coordinated with Iran as unacceptable and dangerous.
The warning came after Oman announced temporary shipping lanes through the strait in coordination with the United Nations’ shipping agency.
Data from the U.N.’s International Maritime Organization showed that 57 ships carrying about 1,100 seafarers have transited the strait since June 23 under the evacuation plan.
U.S. Secretary of State Marco Rubio sought to reassure Gulf allies wary of Washington’s preliminary accord with Tehran. Speaking in Bahrain — home to the U.S. Navy’s Fifth Fleet — he said the United States was pursuing an enduring peace that would not come at the expense of regional security or prosperity.
He said Tehran would not be allowed to impose fees on vessels using the Strait of Hormuz, which before the war carried around one-fifth of global oil and liquefied natural gas flows.
“The reality of it is that no country on Earth has the right to charge for the use of international waterways. And that will never be an acceptable condition of any deal,” Rubio told Gulf Arab foreign ministers.
Badr bin Hamad Al Busaid, the foreign minister of Oman, which lies across the strait from Iran, told the meeting that future shipping arrangements should not involve tolls.
TRUMP FACES REPUBLICAN CRITICISM
The diplomatic push comes as U.S. President Donald Trump faces growing criticism at home over the Iran war.
In a closed-door meeting with fellow Republicans on Wednesday, Trump clashed with Senator Bill Cassidy, shortly before his administration asked Congress for tens of billions of dollars to pay for the conflict.
Several Republicans who attended said Trump engaged in a shouting match with Cassidy, who said the administration needed to explain the framework deal Trump signed last week that gives Iran financial incentives but falls short of the goals he laid out at the war’s beginning.
“It does not appear, although I don’t know for sure, that the course of this is going the way that we were told,” Cassidy told reporters.
In a move seen as supportive of Trump, Senate Republican leaders scheduled a late-night vote to block a resolution seeking to end hostilities with Iran.
The Senate voted 50 to 47 to stop the war powers measure, which had advanced procedurally in May.
“This vote puts Iran on notice,” Trump said on social media after Wednesday’s vote, although it does not affect the earlier vote.
IRAN WAR WEIGHS ON TRUMP’S REPUBLICANS
The war is weighing heavily on Trump ahead of November elections that will determine control of Congress. Just one in four Americans believes the war was worth its costs, a Reuters/Ipsos poll showed.
Conflicting accounts have emerged over elements of the framework deal, which has prompted criticism of Trump at home and abroad.
Disagreements persist over financial incentives for Iran, nuclear inspections, control of the Strait of Hormuz and Israel’s parallel war in Lebanon.
The deal sets up 60 days of talks to tackle thornier issues, such as Iran’s nuclear programme.
REGIONAL SCEPTICISM
The deal has provoked scepticism in the Middle East, where many states came under attack from Iran during the war and view it as too generous to Tehran, including a $300 billion fund and the easing of some sanctions.
Washington’s Gulf allies fear the reconstruction fund could help Iran rebuild its military. The accord also does not address Tehran’s ballistic missile capacity.
Under the agreement, Iran must allow shipping to move freely through the Strait of Hormuz for 60 days, and Tehran has suggested it might impose tolls after that.
Iran could propose environmental, navigation and security fees in upcoming talks with Gulf states, said a diplomat briefed on the talks. Washington and its Gulf allies oppose such fees.
ISRAEL, LEBANON MEET IN WASHINGTON
In Washington, Lebanon and Israel on Wednesday discussed a U.S.-backed proposal for Israel’s forces to pull out of some territory it invaded.
On Thursday, senior Israeli and Lebanese officials denied there had been any Israeli withdrawal from occupied southern Lebanon, after a U.S. official said Israel had pulled some of its troops back in a good faith gesture.
Israel has been battling Hezbollah in Lebanon since the militant group attacked Israel on March 2 in support of Iran, and Tehran has made a cessation of hostilities there central to its demands in any lasting peace deal with the United States.
(Reporting by Reuters bureaus; Writing by Ros RussellEditing by Gareth Jones)
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