Brent crude oil prices have fallen below $75 a barrel for the first time since the war began in late February, with the global benchmark shedding as much as 3.1% to its lowest level since February 27. This decline is largely attributed to increased confidence among shipowners, as more tankers are transiting the Strait of Hormuz with their satellite signals switched on.
More ships are now openly crossing the Strait of Hormuz, the world's most critical energy chokepoint, with seven tankers, including two fully-laden non-Iranian supertankers, either being in or having crossed the strait on Tuesday, June 23, all broadcasting their locations. The International Maritime Organization has also confirmed receiving safety guarantees, allowing hundreds of ships to exit the Persian Gulf. This surge in traffic, along with workarounds established during the conflict, has contributed to a significant increase in oil flow, with the UAE alone exporting around 60 million barrels from the Persian Gulf in recent weeks.
The drop in oil prices, down about 40% from their wartime high, is also influenced by early progress in peace talks between the U.S. and Iran to end the war. Although negotiations are expected to be protracted, this has further boosted market confidence regarding oil supply. The International Energy Agency estimates that the UAE is exporting at nearly 85% of pre-war levels, and Kuwait and Iraq are also increasing production, indicating the region's ability to quickly restore supply.
Despite the overall trend of falling prices, some markets show signs of tightness. The American Petroleum Institute (API) reported a 1 million barrel fall in crude inventories at Cushing, Oklahoma, last week. If confirmed, this would bring stockpiles below the 20 million-barrel minimum operating level. President Trump has also ordered the Department of Justice to investigate why gasoline prices, which have declined 14% since late May to below $4 a gallon nationally, haven't decreased faster given the drop in crude oil prices.
Separately, data from maritime intelligence firm Kpler indicates that 172 vessels have crossed the Strait of Hormuz since the US-Iran deal was signed on June 18, with 42 crossings on Saturday alone. This figure, however, is still below the pre-conflict average of around 138 daily crossings. Concerns about sea mines still exist in the central shipping lanes, leading the Joint Maritime Information Center (JMIC) to recommend a narrower southern route closer to Oman, which has been confirmed as mine-clear. At least four tankers were observed using this southern route on Tuesday.
