In brief
OIL has dropped to pre‑conflict prices as the US‑Iran Memorandum of Understanding ends the block on the Strait of Hormuz, allowing traffic to resume. Brent crude briefly slid below $72 before settling around $73 a barrel, a level seen before the Iran conflict began. Shipping data shows 284 vessels passing the strait since the deal, up from zero during the peak of the war, yet still below pre‑war daily averages. Energy experts warn that any new tensions could cause prices to rise again, while fuel pump levels are expected to fall to around 150p a litre in the UK in the coming weeks. In the United States, gasoline prices have eased to about $3.93 a gallon, but manufacturers say prices do not track crude perfectly.
Global benchmark Brent crude fell briefly below $72.48 a barrel, the price it traded at the day before U.S. and Israeli attacks on Iran, then climbed to $73.23. The slide in oil costs is linked to a new memorandum between the United States and Iran that will negotiate the nuclear programme and include a 60‑day cease‑fire of hostilities.
The blockade closed one of the world’s most vital oil shipping lanes, the Strait of Hormuz, and the lockdown triggered a sharp rise in prices. Since the agreement was signed on June 17, the methodical resurgence of vessels has seen 284 ships transit the strait – a far‑reduced but significant increase from the zero traffic during the height of the conflict.
The vehicles passing the waterway span crude oil, liquefied natural gas, fertiliser and other commodities according to maritime data firm Kpler. Shipping traffic remains well below the average of about 138 crossings before the war but is steadily climbing as firms navigate the new safety protocols set out by the U.S. Navy and Irian authorities.
Meanwhile, fuel costs are poised to fall by a few pence in the UK, with the average petrol rate predicted to drop below 150p a litre in the near future. In the United States, gasoline has fallen to roughly $3.93 per gallon, though there is still a lag between crude and retail prices. Political leaders in Washington have accused major oil majors of withholding price reductions, prompting calls for investigations.
Analysts note that while prices have eased to historic lows, market participants remain vigilant. The risk of renewed hostilities could quickly send oil higher again, a scenario that could ripple outward to global economies and consumer prices.
