Oil prices declined to near pre-war levels on Thursday as an agreement was signed between the US and Iran, raising hopes that crude flows through the Strait of Hormuz could gradually return to normal and ease concerns over global supply disruptions. Brent crude slipped below $75 a barrel, while West Texas Intermediate traded near $74, extending a sharp pullback that has erased most of the gains triggered by the conflict earlier this year.
Crude oil WTI fell 2.73% to $74.72 as of 3:18 p.m. back to its early-March level, while Brent fell below $75.
Markets are now shifting their focus from geopolitical risks to the pace at which oil exports and shipping activity can recover across the Persian Gulf.
President Donald Trump said the agreement had been signed and would pave the way for a rapid reopening of the Strait of Hormuz, one of the world’s most important energy chokepoints. Before the conflict, the narrow waterway carried roughly a fifth of global oil supplies. The route was effectively shut after Iran blocked access following military strikes by the US and Israel on its nuclear facilities, with Washington later imposing its own blockade.
Iran signaled that a full normalisation of oil exports would depend on the lifting of US sanctions. Foreign Ministry spokesperson Esmail Baghaei said Iran must be able to sell its oil freely, while shipping, insurance and payment channels must operate without restrictions.
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While the agreement marks a major step toward restoring trade flows, the energy industry remains cautious. Oil companies, traders and shipowners are waiting for greater clarity on operational details before fully resuming activity in the region. However, there are early signs of movement. Some vessels have started rerouting toward the Middle East, while Iranian tankers loaded with crude have begun leaving ports.
Iraq, the second-largest oil producer in the region, has also indicated that it is preparing to increase exports as supply routes reopen. Market participants expect additional barrels from Gulf producers to gradually return to global markets over the coming weeks.
Despite the fall in prices, underlying supply conditions remain relatively tight. Inventory levels at Cushing, Oklahoma — the delivery point for US crude futures and the country’s largest commercial storage hub — have dropped to around 20 million barrels, a level many traders view as close to the operational minimum.
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