Oil Prices Slide to Pre-Iran War Lows as Hormuz Flows Normalize

Oil Benchmarks Extend Losses

As of 02:05 ET (06:05 GMT) on Thursday, Brent oil futures for August delivery were down 1.8% at $72.42 per barrel, while West Texas Intermediate (WTI) crude futures fell 1.5% to $69.27 per barrel. Both benchmarks touched their lowest levels since February 27, the day before the U.S.-Iran conflict began.

The latest move follows a nearly 4% drop in the previous session and marks a sharp reversal from earlier in the year, when disruptions and closures in the Strait of Hormuz had driven Brent crude above $120 a barrel at the peak of the crisis. With recent declines, prices have shed most of the risk premium associated with the conflict.

Strait of Hormuz Flows and Iranian Exports

Market attention remained centered on the Strait of Hormuz, a critical transit route through which roughly one-fifth of global oil consumption passes. U.S. Energy Secretary Chris Wright stated that crude flows through the waterway were close to normal, with around 20 million barrels exiting the strait over the past 24 hours under military protection.

Citing shipping data, reports indicated that more vessels have resumed transits through the strait after weeks of disruption, and several tankers previously stranded in the Gulf have restarted their voyages. Investors also evaluated the potential for Iranian oil exports to recover following temporary U.S. sanctions relief and an easing of regional hostilities, which has reduced concerns over a prolonged supply crunch. Nevertheless, analysts warned that any renewed tensions between Iran and the U.S. could quickly revive supply fears.

Mixed U.S. Inventory Data Adds to Bearish Tone

Additional downside pressure came from mixed U.S. petroleum inventory data released by the Energy Information Administration on Wednesday. U.S. commercial crude inventories fell by 6.1 million barrels in the week ended June 19, to 412.1 million barrels, the lowest level since January 2025 and a larger draw than analysts had anticipated. Crude stocks at the Cushing, Oklahoma, delivery hub declined by about 1.1 million barrels, reaching their lowest level since 2014.

However, product inventories moved in the opposite direction. Gasoline inventories increased by 2.1 million barrels, while distillate stocks, including diesel and heating oil, rose by 3.1 million barrels, contributing to a generally bearish sentiment in oil markets despite the steep crude draws.

FAQ

What are current Brent and WTI prices?
As of 02:05 ET (06:05 GMT) on Thursday, Brent futures for August were at $72.42 per barrel, and WTI crude futures were at $69.27 per barrel.

Why have oil prices fallen to pre-Iran war levels?
Prices have declined as traffic through the Strait of Hormuz has improved, supply disruptions have eased, and expectations have grown that Iranian exports could recover, reducing the geopolitical risk premium.

How significant is the Strait of Hormuz for global oil supply?
The Strait of Hormuz is a key transit route through which roughly one-fifth of the world’s oil consumption passes, making its operational status critical for global energy markets.

What did the latest U.S. inventory report show?
The Energy Information Administration reported a 6.1 million-barrel draw in U.S. commercial crude inventories to 412.1 million barrels, a decline in Cushing stocks of about 1.1 million barrels, and increases of 2.1 million barrels in gasoline and 3.1 million barrels in distillate inventories.