Oil Prices in the Strait of Hormuz See Smallest Decline in Three Months

The price of oil has fallen to its lowest level in nearly 15 weeks, even as uncertainty remains over when the Strait of Hormuz will reopen.

Brent crude dropped almost 2.5% today, closing at just over $81 per barrel after a 4.75% decline on Monday. This is the lowest price since March 4, the day the Iran war began.

Although the current price is still well above Brent’s pre‑war level of $72.48 per barrel, it reflects the market’s expectations for increased Middle Eastern supply once the strait reopens.

Oil traders anticipate that the reopening will boost oil supplies from the region, following Donald Trump’s claim that the waterway will reopen once the United States and Iran finalize an initial memorandum of understanding.

Economists warn, however, that normal traffic through the strait will take time. Certain production facilities need to be reopened or repaired, and some oil and gas tankers are currently positioned in unsuitable locations.

The CEO of Mitsui OSK Lines, the world’s largest tanker operator, told the Financial Times that shipowners will not resume transit through the Strait of Hormuz for several weeks until they are assured that the US‑Iran agreement is “material.”

Kathleen Brooks, research director at XTB, explains, “Leaders of the largest shipping companies seek more than just a formal agreement; they require the clearance of mines and the cessation of all hostilities before tankers carrying cargo worth hundreds of millions of dollars can navigate the Strait without the risk of renewed tensions that could disrupt their journey.”

“Therefore, even if a deal is reached to end the US/Iran conflict, the situation remains fraught with challenges,” Brooks adds. “Brent crude continues to trade above $80 per barrel, and it is unlikely to dip below this threshold until we observe successful passage of cargo ships through the Strait.”