Oil prices fall as shipping through the Strait of Hormuz resumes, easing the war risk premium.
Global oil prices extended their decline on Thursday morning (July 2, 2026, 8:12am Tokyo time) as easing geopolitical tensions in the Middle East and the gradual reopening of shipping through the Strait of Hormuz continued to reduce concerns over supply disruptions.
According to OilPrice.com, West Texas Intermediate (WTI) crude fell 58 cents, or 0.85%, to $68.00 per barrel.
Murban crude, the Middle Eastern export benchmark, recorded the sharpest drop, tumbling $3.37, or 4.88%, to $65.64 per barrel.
Trading Economics reported that Brent crude, the global benchmark, slipped $1.78, or 2.45%, to $71.162 per barrel as of 8:30am Tokyo time.
Selloff
The latest selloff follows a surge in oil prices during the recent US–Iran conflict, when fears that Iran could block the Strait of Hormuz — a critical shipping route handling roughly one-fifth of global oil supplies — drove a geopolitical risk premium across energy markets.
That premium has since largely unwound after the June 17 US–Iran Memorandum of Understanding (MOU), which committed both sides to restoring commercial shipping through the Strait of Hormuz as part of wider ceasefire and de-escalation efforts.
Hormuz traffic starts recovery
Shipping traffic through the waterway has begun to recover, though vessel movements remain well below pre-conflict levels.
Analysts say the decline also reflects rising expectations that physical oil supplies will remain largely uninterrupted, while major producers continue to pump at elevated levels.
Investors are increasingly shifting focus away from geopolitical risk toward market fundamentals, including global demand, inventory levels, OPEC+ production policy, and US output.
The sharp drop in Murban crude — widely used as a pricing benchmark for Asian refiners — also points to growing confidence that Gulf exports will continue flowing despite lingering regional tensions.
If shipping through the Strait of Hormuz continues to normalise, traders say crude prices could remain under pressure unless a new supply disruption occurs or global demand strengthens more than expected.
