Brent crude settled at $73.74 per barrel, down $3.34 (-4.3%), while West Texas Intermediate (WTI) crude settled at $70.34 per barrel, down $2.87 (-3.9%). During the session, Brent touched its lowest level since February 27, while WTI briefly traded below $70 per barrel for the first time since early March.
Market sentiment was driven by signs that shipping conditions through the Strait of Hormuz continue to normalize. U.S. officials reported that crude oil flows through the waterway have recovered to levels approaching those seen before the conflict, aided by military escorts and expanded navigation routes. Several previously stranded tankers carrying millions of barrels of crude successfully exited the region, adding to expectations that additional supplies will reach global markets in the coming weeks.
Further pressure came from expectations that Iranian exports could increase following the recent sanctions waiver and ongoing negotiations between Washington and Tehran. Physical crude markets weakened globally as additional Middle Eastern barrels became available, while near-term supply conditions improved enough to reduce concerns about immediate shortages. Analysts noted that Iranian production and exports could recover relatively quickly given the large volumes already stored in floating inventories.
Despite the decline in crude prices, underlying inventory levels remain exceptionally tight. U.S. commercial crude inventories and Strategic Petroleum Reserve holdings combined fell by 15.1 million barrels during the latest reporting week, leaving total U.S. crude stocks at their lowest level since 1984. However, for now, the market’s focus remains on recovering supply and improving shipping conditions rather than inventory shortages.
Looking ahead, traders will continue monitoring the durability of the U.S.-Iran agreement, the pace of production recovery across the Gulf region, and the return of normal shipping operations through the Strait of Hormuz. While risks remain, growing confidence that disrupted oil exports will continue returning to market has shifted the near-term outlook decisively toward increased supply and lower prices.