Oil Prices Fall to Pre-War Levels as Hormuz Traffic Resumes

Global oil markets registered sharp declines Thursday as tanker traffic through the Strait of Hormuz returned after a US-Iran agreement reopened the waterway. Brent crude for August delivery traded at $72.26 to $72.75 a barrel, while West Texas Intermediate settled near $68.19 to $69.60, levels last seen February 27 before the February 28 outbreak of hostilities. The moves erased most of the wartime premium that had lifted prices above $80 earlier in the conflict.

The price drop followed two concrete supply developments. More than 20 non-Iranian tankers carrying roughly 35 million barrels exited the strait since the June 18 memorandum of understanding, according to Kpler data cited by CNBC; Brussels-based maritime intelligence firm Kepler, relayed through UPI, recorded over 170 total transits of crude, LNG and fertilizer cargoes beginning that date. US Energy Secretary Chris Wright stated that at least 20 million barrels had moved in the prior 24 hours and that full pre-war volumes would require several weeks of mine clearance. Oman opened temporary routes Wednesday to manage departures.

A separate US policy change amplified the supply signal. The Treasury Department issued a 60-day general license Monday authorizing dollar-denominated sales of Iranian crude, petrochemicals and refined products through August 21, lifting sanctions that had blocked such transactions for decades. At least 30 of the transiting vessels carried Iranian oil or petrochemicals, according to United Against Nuclear Iran analyst Jemima Shelley. Iran has signaled plans to impose maritime service fees on transits; the United States maintains the strait remains an international waterway.

Lingering restrictions and warnings limit the scope of normalization. Iran’s Islamic Revolutionary Guard Corps Navy said Thursday that only routes it designates would be permitted and that non-compliant vessels would face action. Daily transits remain well below the pre-war average of 138 vessels. US Vice President JD Vance met Iranian negotiators in Switzerland over the weekend as part of the 60-day framework established by last week’s accord.

Downstream effects appeared in retail markets. The national average for regular gasoline fell to $3.92 per gallon, down from $4 a week earlier, AAA data showed. President Trump directed the Justice Department to investigate whether oil companies are passing through the full extent of the crude-price decline. Fertilizer prices also eased following the arrival of cargoes through the reopened strait, producing mixed margin impacts for US agricultural producers depending on their hedging positions and regional distribution costs.

The central tension remains the durability of the current easing. The 60-day authorization and maritime hotline provide a narrow window for further talks on Iran’s nuclear program, yet both sides retain leverage to reimpose restrictions if negotiations stall.