Oil prices experienced a significant drop, with Brent crude falling over 4% to below $74 a barrel, its lowest point since the conflict began. Similarly, US West Texas Intermediate (WTI) crude decreased by nearly 4% to approximately $70 a barrel. This downturn follows a pause in military strikes between the US and Iran concerning the Strait of Hormuz, a critical waterway for global energy trade.
Several factors contributed to the price decline. Tanker traffic through the Strait of Hormuz began to recover, easing fears of supply shortages. Oman announced a temporary, fee-free shipping transit corridor through the Strait. Furthermore, the International Energy Agency reported that the UAE had restored oil exports to nearly 85% of pre-conflict levels by early June. Sasha Foss, an energy analyst at CSC Commodities, attributed market confidence to a US and Iran agreement made on June 17, which reduced concerns about supply disruptions.
Adding to the downward pressure, President Trump indicated that the US was in the "final stages" of a deal with Iran and that the Strait of Hormuz would be "open to all." Although the US paused its strikes for a second night, it maintained a naval blockade of Iranian ports. Early reports from Wednesday suggested that a South Korean supertanker, followed by two Chinese supertankers, successfully transited the strait. While these movements do not signal an end to the crisis, they illustrate a potential new operating pattern, possibly involving Iranian clearance and controlled lanes. Arsenio Longo from intelligence firm HUAX suggested that some countries might be negotiating direct deals with Iran for safe passage.
