Market Overview

Oil prices extended a four‑day decline on Thursday, with Brent August futures slipping 0.5% to $73.38 per barrel and West Texas Intermediate (WTI) futures easing 0.3% to $70.14 per barrel. Both benchmarks had dropped nearly 4% in the prior session, pushing Brent to its lowest level since 27 February, the day before the U.S.–Iran conflict began, effectively erasing most of the geopolitical risk premium that had built up during the war.

Strait of Hormuz Traffic Normalisation

The Strait of Hormuz, which carries roughly 20 % of global oil consumption, saw traffic return to near‑normal levels. U.S. Energy Secretary Chris Wright reported that about 20 million barrels transited the waterway in the preceding 24 hours under military protection. Shipping data corroborated the resurgence, showing a growing number of vessels resuming transit after weeks of disruption and several tankers previously stranded in the Gulf restarting their voyages. Investors were further reassured by expectations that Iranian oil exports could rebound following temporary U.S. sanctions relief and a de‑escalation of regional hostilities.

U.S. Crude Inventory Data

The Energy Information Administration released mixed inventory figures on Wednesday. Commercial crude inventories fell by 6.1 million barrels in the week ended 19 June, reaching 412.1 million barrels, the lowest level since January 2025 and a larger draw than analysts had forecast. At the Cushing, Oklahoma delivery hub, crude stocks declined by roughly 1.1 million barrels, hitting their lowest point since 2014. Conversely, gasoline inventories rose by 2.1 million barrels, and distillate stocks (including diesel and heating oil) increased by 3.1 million barrels.

Risk Outlook

Despite the current easing of supply concerns, analysts cautioned that any renewal of tensions between Iran and the United States could swiftly reignite fears of a supply crunch. Earlier in the year, the closure and disruption of Hormuz traffic had propelled Brent crude above $120 per barrel, underscoring the market’s sensitivity to geopolitical developments.