Global oil prices fell to their lowest levels since the outbreak of the U.S.-Iran conflict, with Brent crude dropping to around $72 per barrel on Thursday amid improving market confidence and increased oil flows through the Strait of Hormuz.
Gatekeepers News reports that Brent crude futures for August delivery declined by $1.06, or 1.44 per cent, to $72.68 per barrel as of 0639 GMT, while U.S. West Texas Intermediate (WTI) crude slipped 76 cents, or 1.08 per cent, to $69.58 per barrel.
The latest decline follows a sharp retreat from the highs recorded during the conflict, when concerns over disruptions to shipping through the Strait of Hormuz pushed prices significantly higher.
According to Oilprice.com, crude prices dropped from $76.75 per barrel on Tuesday to $73.50 on Wednesday, extending losses as fears over supply disruptions eased.
Market analysts attributed the decline to rising crude supplies from the Middle East and expectations that Iran could increase oil exports following a temporary reprieve from U.S. sanctions.
Investor sentiment was also boosted by optimism that the recent U.S.-Iran agreement would help keep the Strait of Hormuz open, alongside reports of a gradual increase in shipping activity through the strategic waterway.
An initial accord reached last week to end the conflict involving the United States, Israel and Iran, which began on February 28, paved the way for the resumption of tanker traffic through the strait.
The agreement provides a 60-day negotiation window to address more complex issues, including Iran’s nuclear programme.
Energy Secretary Chris Wright reportedly expressed confidence that oil shipments would continue through the Strait of Hormuz even if the agreement falters, insisting Iran would be unable to shut the waterway again.
In a further move to ease maritime congestion, Oman on Wednesday opened temporary routes to facilitate tanker departures from the strait, with authorities working alongside the International Maritime Organization to coordinate vessel movements.
Traders, however, remain cautious as they continue to monitor shipping activity and broader geopolitical developments in the Middle East.
Meanwhile, U.S. President Donald Trump linked the decline in oil prices to increased oil flows through the Strait of Hormuz.
“19 million barrels of oil flowed out of the Hormuz Strait yesterday, an all-time record. Oil prices are tumbling down, and the world is a much safer place,” Trump said in a post on social media.
Analysts say the direction of oil prices in the coming weeks will largely depend on the durability of the ceasefire arrangement, progress in diplomatic negotiations, and the stability of shipping routes through one of the world’s most important energy corridors.
