Oil prices extended losses on Thursday, falling to their lowest levels in nearly four months as concerns over supply disruptions in the Middle East continued to fade following the Iran-Israel ceasefire.
Brent crude futures for August delivery dropped $1.22, or 1.7%, to $72.52 a barrel by 0337 GMT, while US West Texas Intermediate (WTI) crude fell $1.02, or 1.5%, to $69.32 a barrel. Both benchmarks touched their lowest levels since February 27.
The decline reflects growing confidence that oil supplies from the Middle East will remain uninterrupted. August Brent also traded below the September contract, a market structure that signals comfortable near-term supply.
“The speed of this decline has caught plenty off guard as markets price in a much faster return of Middle Eastern barrels than most had anticipated just a fortnight ago,” IG market analyst Tony Sycamore said.
Oil prices had already tumbled sharply on Wednesday, with Brent and WTI each losing nearly $3 as fears of prolonged supply disruptions eased.
US Energy Secretary Chris Wright said on Wednesday that oil shipments through the Strait of Hormuz have nearly returned to pre-conflict levels, with at least 20 million barrels passing through the strategic waterway over the past 24 hours. He noted that full normalization could take several weeks as demining operations continue.
Expectations of increased crude exports from the Middle East, coupled with prospects of higher Iranian oil sales following temporary US sanctions relief, have also weighed on global crude prices.
The recent ceasefire between Iran and Israel has helped restore shipping through the Strait of Hormuz, a key route for global oil exports. The agreement also launched a 60-day negotiation process aimed at addressing broader issues, including Iran’s nuclear programme.
