Crude oil fell below $75 per barrel on Thursday, its lowest level since early March, after markets reacted to news that the United States and Iran had reached an agreement to end a prolonged conflict that triggered the largest supply disruption on record. Early signs of stabilization appeared as several vessels resumed transiting the Strait of Hormuz following weeks of disruption. President Donald Trump announced that an interim deal had been signed, with plans to rapidly reopen the critical Persian Gulf shipping lane.
A normalization of flows through Hormuz could enable major producers such as Saudi Arabia, the UAE, and Iraq to restart millions of barrels per day of previously halted output. Oil prices have already declined about 38% since hitting a four-month high in April. Shipping activity is showing tentative signs of recovery, with Saudi oil tankers, along with vessels carrying LNG and refined fuels, departing the Gulf region. Nonetheless, inventories remain tight: crude stocks at Cushing, the largest US storage hub, have dropped to roughly 20 million barrels.
