Global oil prices fell to around $72 per barrel on Thursday, their lowest level since the United States-Iran conflict began in February, as easing geopolitical tensions and increased crude supply boosted market confidence.
Brent crude futures for August delivery declined by $1.06, or 1.44 per cent, to $72.68 per barrel as of 0639 GMT. U.S. West Texas Intermediate crude also dropped by 76 cents, or 1.08 per cent, to $69.58 per barrel.
According to Oilprice.com, crude prices fell sharply from $76.75 per barrel on Tuesday to $73.50 on Wednesday after surging earlier during the conflict amid fears that shipping through the Strait of Hormuz could be disrupted.
The decline in prices was driven by rising crude supply from the Middle East and expectations that Iran could increase oil exports following a reprieve from U.S. sanctions.
Market sentiment also improved as traders expressed optimism that the recent agreement between the United States and Iran would help ensure the continued operation of the Strait of Hormuz, one of the world’s most important oil transit routes.
Reports of a slight increase in shipping traffic through the strategic waterway further supported confidence in global oil supply stability.
An initial accord reached last week to end the U.S.-Israeli war with Iran, which began on February 28, paved the way for the resumption of normal shipping activities through the strait.
The agreement established a 60-day negotiation period to address more complex issues, including Iran’s nuclear programme.
Industry observers noted that oil exports are expected to continue flowing through the Strait of Hormuz even if negotiations encounter challenges, reducing fears of a major supply disruption.
In a move aimed at easing maritime congestion, Oman on Wednesday opened temporary shipping routes to facilitate tanker departures from the strait. The International Maritime Organization and Omani authorities are reportedly coordinating vessel movements to improve traffic flow.
According to CNN, traders remain focused on monitoring shipping activity through the Strait of Hormuz and assessing whether tensions across the Middle East remain under control.
Meanwhile, United States President Donald Trump attributed the decline in oil prices to increased crude shipments through the strategic waterway.
In a statement posted on his social media platforms on Tuesday, Trump revealed that a record 19 million barrels of oil passed through the Strait of Hormuz on Monday.
“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.
The latest drop in oil prices is expected to provide relief to energy-importing countries and industries heavily dependent on fuel, while also easing inflationary pressures linked to high energy costs.
