The price of Brent crude dropped below $75 a barrel on Wednesday for the first time since 27 February, the day before the United States and Israel launched military strikes on Iran. August Brent futures settled at $73.74 on the ICE exchange, a decline of 4.3%, while West Texas Intermediate fell 3.9% to $70.34, briefly trading under $70. The moves erased the entire risk premium built up during nearly four months of conflict that had at one point pushed Brent above $119.

The sell-off was driven by the accelerating resumption of tanker traffic through the Strait of Hormuz, the narrow waterway through which roughly one-fifth of global oil and liquefied natural gas normally transits. US Energy Secretary Chris Wright told the Reuters Global Energy Forum that 72 vessels carrying approximately 20 million barrels of crude had exited the strait in the preceding 24 hours. The International Maritime Organization confirmed it had begun an evacuation plan for hundreds of ships and 11,000 seafarers stranded in the Gulf, using two temporary corridors—one along the Iranian coast and a southern route coordinated by Oman and the United States. Maritime data firm Kpler recorded 25 commodity-ship transits on Tuesday, up from a weekly average of 10 before the US-Iran memorandum of understanding was signed on 18 June, though still far below the pre-war norm of around 125 daily crossings.

Viewed from Washington, the diplomatic framework is reshaping supply expectations. The Treasury Department’s Office of Foreign Assets Control issued a general licence valid until 21 August 2026 authorising transactions involving Iranian oil, petrochemicals and petroleum products. President Trump stated that Iran had informed Washington it would not impose tolls, insurance costs or other fees on vessels transiting Hormuz, while Secretary of State Marco Rubio said a technical negotiating team would return to the region before the end of the month. In Tehran, officials pushed back on the characterisation of inspection commitments, and a military source told the Fars news agency that a limited number of vessels were being allowed through daily in coordination with the Revolutionary Guard navy. Oman’s maritime security centre declared its support for freedom of navigation and opposition to transit fees.

The price decline is feeding through to broader financial markets. Yields on US and European government bonds fell sharply as traders reassessed inflation trajectories, with the ten-year Treasury note dropping from 4.50% to 4.39%. In Brazil, where the central bank is navigating a delicate easing cycle, futures rates plunged more than 20 basis points on the view that cheaper oil would ease price pressures and allow further Selic rate cuts. Analysts at Macquarie Group cut their average Brent forecast for this year to $77 a barrel from $89, while JPMorgan lowered its third-quarter estimate to $86. ING strategists cautioned that the sell-off looked overdone given still-tight physical supply, noting that Cushing inventories had fallen below 20 million barrels, a level considered the operational minimum.

The next factual milestone is the return of the US technical negotiating team to the Middle East, which Secretary Rubio said would occur before the end of June. Full normalisation of shipping, however, depends on mine-clearance operations that US officials estimate will take several weeks. Qatar’s prime minister told the Financial Times that his country would resume normal LNG production within weeks, and nine empty LNG tankers were observed heading toward Qatari loading terminals, the largest such movement since the war began.