Strait of Hormuz: Global crude oil prices one week after US-Iran deal

Global crude oil benchmarks have continued to extend their downward spiral, hitting their lowest levels in nearly four months as physical supply anxieties fade away following the historic interim peace agreement between the United States and Iran.

According to live marketplace data tracked by OilPrice.com, the international benchmarks dropped simultaneously during Wednesday morning trading hours, with Brent Crude at ~$76.47 per barrel (down 0.84%) while WTI (West Texas Intermediate) sells at ~$72.63 per barrel (down 0.79%).

Today’s prices represent a significant collapse from just last week, when Tribune Online reported that international benchmark Brent Crude fell to $78.60 per barrel, while West Texas Intermediate dropped to $75.00 per barrel, marking their lowest levels in approximately three months.

At the absolute peak of the Middle East conflict in May, anxiety over severe shortages had driven Brent to a staggering high of over $116 per barrel.

Strait of Hormuz saga

The rapid market correction is tied directly to shipping logistics in the Middle East with the initial announcement of the diplomatic breakthrough triggering an immediate response in the waterways.

Tribune Online reports that US President Donald Trump claimed last week that ships have begun moving freely out of the Strait of Hormuz following Vice President JD Vance’s declaration of a digital agreement with Iran.

“Ships are starting to move, many loaded with oil, out of the Strait of Hormuz. They are traveling along the Southern Highway, which is totally safe, secure, and pristine. There are also other areas for travel!” Trump posted on Truth Social.

While Trump signed the 14-point Memorandum of Understanding (MoU) at a state dinner hosted by French President Emmanuel Macron at the Palace of Versailles last week, reports say Iran said President Masoud Pezeshkian also endorsed the document.

Tribune Online reports, however, that days after the signing of the MoU, Iran on Saturday declared the closure of the strategic waterway, accusing Israel of violating a ceasefire agreement through continued deadly attacks in southern Lebanon. 

While the market is projected to react to the recent closure of the Strait of Hormuz, Trump’s White House claimed that the Strait remains open despite Iran’s announcement. 

Prior to the truce, the strategic maritime chokepoint, which handles roughly 20% of global petroleum transit, had been severely restricted by military blockades and escalating threats since late February.