LONDON: Global oil prices extended their decline on Thursday, approaching pre-conflict levels as maritime traffic through the Strait of Hormuz resumed and concerns over supply disruptions eased following a preliminary agreement aimed at ending tensions involving the United States, Israel, and Iran.
Brent crude futures fell by $1.22, or 1.65 percent, to $72.52 per barrel, while U.S. West Texas Intermediate (WTI) crude dropped $1.02, or 1.45 percent, to $69.32 per barrel. Murban crude was trading at $66.45 per barrel.
Market analysts attributed the decline to the rapid recovery of oil shipments through the Strait of Hormuz, a key global energy transit route. The departure of oil tankers that had been delayed in the region has helped restore confidence in global supply chains.
According to analysts, the pricing structure of Brent crude contracts suggests ample short-term oil supply. The August Brent contract has fallen below the September contract, indicating reduced concerns about immediate supply shortages.
Tony Sycamore, an analyst at IG, said the speed of the Middle East’s oil supply recovery had surprised markets, with investors increasingly pricing in a quicker-than-expected return to normal conditions.
On Wednesday, both Brent and WTI crude prices had already recorded declines of nearly $3 per barrel.
Speaking at an energy forum, U.S. Energy Secretary Chris Wright stated that oil flows through the Strait of Hormuz had returned to nearly pre-conflict levels.
More than 20 million barrels of oil reportedly passed through the waterway during the past 24 hours. However, he cautioned that complete normalization could take several weeks as maritime routes still need to be cleared of potential hazards, including naval mines.
Shipping activity in the Strait resumed after a preliminary agreement reached last week between the United States, Israel, and Iran. Under the arrangement, negotiations on Iran’s nuclear program and other key issues are expected to continue over the next 60 days.
Meanwhile, Oman has opened temporary shipping corridors to facilitate the movement of oil tankers through the Strait. Omani authorities, together with international maritime organizations, are coordinating efforts to ensure safe and efficient navigation.
Separately, the U.S. Energy Information Administration (EIA) reported that U.S. crude oil inventories had fallen to their lowest level since 1984. Nevertheless, traders remained focused on developments in the Strait of Hormuz, limiting the impact of the inventory data on oil prices.
The continued restoration of shipping and energy exports through the Strait is expected to remain a key factor influencing global oil markets in the coming weeks.
