Oil prices slipped back to levels seen before the Iran war as tanker traffic through the Strait of Hormuz picked up and a wave of supply trapped inside the Persian Gulf for months started flowing again.
The most actively traded Brent futures contract, which expires July, fell 1.3% to $72.88 a barrel in midmorning European trading on Thursday, while the U.S. oil gauge West Texas Intermediate was down 1.2% to $69.44 a barrel. Both benchmarks have fallen nearly 30% so far this month.
"The market is likely extrapolating the swift, thus far, recovery of Mideast supply and already pricing expected future surpluses," analysts at Goldman Sachs said.
The reopening of the key waterway and a U.S. waiver on Iranian oil sales following an interim deal between Washington and Tehran marked a significant turning point for Gulf crude markets.
Transits of Middle Eastern crude via Hormuz have risen to about 4.9 million barrels a day so far in June, according to data provider Kpler. That remains well below the 2025 average of roughly 13 million barrels a day, but marks a clear rebound from the depressed levels seen during the war.
The pickup in transit reflects both an increase in vessel crossings through the waterway and a greater share of ships turning their tracking signals back on.
Investors are also reassessing how much geopolitical risk should be embedded in longer-dated oil prices.
"Beyond the spot-price selloff, the market is increasingly challenging its prior assumption that long-dated prices need to incorporate a sticky security premium," Goldman analysts said. "While supply disruption risk is high, the ability of the oil market to respond to the sharpest oil supply shock ever has been a key surprise that is likely eroding this security premium."
Still, some analysts caution that recent price moves may be overdone. Despite the rebound, it will take time for Gulf flows to normalize, and uncertainty remains over how the Strait of Hormuz will be governed going forward.
"There are a range of hurdles that need to be tackled beyond the logistical challenges of repositioning ships," economists at HSBC said. "For instance, clearing mines in shipping lanes--so far only two lanes have been deemed safe."
Meanwhile, inventories continue to be drawn.
U.S. crude oil inventories fell for a ninth consecutive week, with commercial crude oil stocks excluding the Strategic Petroleum Reserve down by 6.1 million barrels.
Write to Giulia Petroni at giulia.petroni@wsj.com
(END) Dow Jones Newswires
June 25, 2026 05:46 ET (09:46 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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