World crude oil costs, as tracked by Brent futures, have fallen sharply beneath $67 per barrel, down from a month-to-month excessive of $77.08 on June 19, as issues over a significant provide disruption eased.
The drop comes after Iran shunned blocking the Strait of Hormuz, a important passage for world oil shipments, regardless of heightened tensions within the area.
On June 22, 2025, the U.S. Air Drive and Navy struck three Iranian amenities in a bid to discourage Tehran’s nuclear ambitions and stop it from weaponizing uranium.
The transfer sparked fears that Iran would retaliate by halting oil site visitors by way of the strait, by way of which about 20% of the world’s oil provide flows.
Markets braced for affect, anticipating a swift and extreme response from Iran. However as an alternative of closing the important waterway, Iran launched a retaliatory strike on a U.S. navy base in Qatar.
- The choice to not disrupt delivery lanes helped ease fears of a provide shock.
Consequently, oil costs started to retreat. The sharpest decline got here on June 23, when costs dropped to $70.52, earlier than sliding additional to $66.17 the next day—a degree that has since held regular.
The Strait of Hormuz:
The Strait of Hormuz is among the world’s most important power corridors, with greater than 20 million barrels of oil passing by way of it every year, in response to a report by the Power Press.
- Iran borders the northern fringe of the strait, giving it strategic management over this significant passage.
The Strait is crucial for main oil producers within the Persian Gulf, together with Saudi Arabia, Iraq, the UAE, and Kuwait, because it serves as the first route for delivering oil to world markets.
- In reality, over 90% of the area’s oil exports movement by way of this slim channel.
To scale back reliance on the strait, Saudi Arabia developed the Petroline pipeline, which transports crude oil from the jap metropolis of Abqaiq to the Purple Sea port of Yanbu, providing an alternate export route.
Rising tensions between Israel and Iran from June 13 sparked fears of retaliation and oil provide disruption, pushing crude costs to a month-to-month excessive of $77.08 per barrel on June 19.
Market development
Crude oil started the 12 months at $74.93 per barrel, climbing to a peak of $82.03 on January 15, the best worth recorded thus far this 12 months, earlier than getting into a downward development.
- Rising tariff issues dragged costs decrease from February by way of early March, pushing the commodity beneath $71 per barrel.
A quick restoration in late March prolonged into early April, with costs rebounding to round $74. Nonetheless, by mid-April, oil had misplaced 15.87% of its worth, marking one other sharp decline.
- Momentum shifted once more in Might as rumors of rising tensions between Israel and Iran started to affect the market. As strikes intensified on June 13, oil costs surged, peaking at $77.08 per barrel.
- However when Iran selected to not retaliate by blocking the Strait of Hormuz, fears of a provide disruption light, sending costs tumbling to round $66 per barrel.
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