Oil continued to decline during today’s trading, moving closer to levels seen before the Iran war, as markets began to price Middle East supply risks at lower levels. The main pressure came from expectations that crude flows through the Strait of Hormuz could return faster than expected, alongside Iran’s readiness to increase oil sales after receiving a temporary waiver from U.S. sanctions.
Brent crude for August delivery fell to $72.68 per barrel, while West Texas Intermediate declined to $69.58, with both benchmarks hitting their lowest levels since February 27. The fact that the near Brent contract traded below the September contract also points to ample immediate supply, which usually weighs on prices in the short term.
The selloff accelerated after comments from U.S. Energy Secretary Chris Wright, who said oil flows through the Strait of Hormuz were close to pre war levels, with at least 20 million barrels passing through in 24 hours. Although a full return to normal may take several weeks because of demining operations, markets have already started to remove a large part of the risk premium that had supported prices earlier.
The initial agreement to end the war with Iran also helped reopen shipping routes through the strait, with a 60 day negotiation period set to discuss more difficult issues, led by Iran’s nuclear program. At the same time, Oman opened temporary routes to help tankers leave, while diplomatic efforts involving Qatar, Oman, Iran, Iraq, and Gulf states began to discuss the future management of the strait.
Macquarie forecasts suggest oil may return quickly to pre war levels as supply chains adapt and Hormuz reopens more broadly. The bank expects Brent to average $67 and West Texas Intermediate to average $62 in the third quarter. Although U.S. crude inventories fell to their lowest level since 1984, this factor did not change market direction, as traders are currently focused more on the return of Middle East supply than on U.S. inventory data.
On the gold side, prices fell near their lowest level in more than seven months after breaking below $4000 for the first time since November 2025. The main pressure came from the dollar rising to a 13 month high and stronger expectations of U.S. interest rate hikes, with markets pricing around a one third chance of a July hike and a 66% chance by September. Dollar strength and the higher cost of holding gold reduced the metal’s appeal, while investors shifted their focus away from safe haven demand toward the impact of high rates and tighter financial conditions.
U.S. dollar also continued to rise to its highest level in more than a year at 101.58, after technology stocks remained under pressure and Wall Street failed to recover from the latest selloff. Despite the decline in U.S. bond yields and a limited easing in rate hike expectations, the Federal Reserve remains committed to a hawkish stance after its economic projections showed a clear inclination toward raising interest rates this year.
You can now benefit from LDN company’s services through the LDN Global Markets trading platform.
