Oil prices have retreated to levels not seen since before the Iran war, with global benchmark Brent crude briefly falling below $72.48 a barrel—the price prior to the US and Israeli attacks on Iran on February 28. This decline is largely attributed to the gradual resumption of traffic through the critical Strait of Hormuz shipping route, which had been effectively closed by Iran following the initial strikes.
The cost of crude has been moving sharply lower since the US and Iran signed a Memorandum of Understanding (MOU) on June 17, setting a 60-day period for negotiations on Tehran's nuclear program and other measures to end the war. US Energy Secretary Chris Wright confirmed that flows through the Strait of Hormuz are nearing pre-war levels, with at least 20 million barrels having exited the strait in the past 24 hours. This increased supply, coupled with expectations of Iran boosting sales after a temporary reprieve from US sanctions, has led to a dramatic reversal in market dynamics, with abundant supply now overwhelming buyers.
While oil prices have fallen, the impact on pump prices has been slower. The average price of regular gasoline in the US has dropped to around $3.93 a gallon, down from $4 a gallon in April, but still above pre-war levels. UK motoring group RAC anticipates petrol prices could fall below 150p a litre in the coming week, and diesel below 160p. US President Donald Trump has accused major energy companies like Shell and ExxonMobil of "gouging" drivers by not reducing fuel prices commensurately with the drop in oil costs, prompting an investigation. The American Petroleum Institute, however, stated that fuel prices do not move in lockstep with crude oil prices.
