Oil price falls to pre-war levels as ships being moving through Strait of Hormuz

Oil Prices Fall to Pre-War Levels as Shipping Resumes Through Strait of Hormuz

Global oil prices have fallen to levels not seen since before the start of the Iran war on 28 February, as traffic through the Strait of Hormuz gradually resumes following an interim accord between the United States and Iran.

Brent crude, the international benchmark, was trading at around $72 a barrel on Thursday morning, according to Africa News, a price last seen the day before the US and Israel launched missile attacks on Tehran. The Guardian reported that Brent fell to a low of $72.24 a barrel on Thursday, while the BBC noted it briefly dipped below $72.48 before edging up to $72.63. Prices have fallen more than 20% this month, The Guardian added.

Coverage Comparison

Across the outlets reviewed, there is broad agreement on the central facts: oil prices have retreated to pre-war levels, and shipping through the Strait of Hormuz has picked up. However, the tone and emphasis vary. Africa News and the BBC presented the developments in a neutral, informative manner, focusing on the price movements. Al Jazeera adopted a more cautious, analytical stance, warning that a lasting recovery depends on whether the two sides can reach a final pact. Another Al Jazeera report struck an optimistic note, describing the reopening as "faster than expected" and highlighting the drop in global oil prices.

There are also differences in the specific figures cited. The Guardian noted that vessel traffic in the Strait doubled over the previous 24 hours to its highest level since late February, citing CNN and MarineTraffic data. The BBC cited maritime intelligence firm Kpler, which reported a significant rise in crossings since the Memorandum of Understanding was signed. TASS, citing the Financial Times, focused on the cost of war risk insurance, reporting that premiums have more than halved.

Key Claims

The US and Iran signed a Memorandum of Understanding on 17 June, setting out a 60-day negotiation period to reach a permanent peace deal, according to multiple sources, including the BBC and Al Jazeera. Under the interim deal, Iran agreed to let ships transit the waterway for 60 days without charge, although the wording has been controversial, with Tehran arguing it allows it to keep control of the Strait in joint accord with Oman, as reported by Al Jazeera.

The resumption of shipping has been dramatic. The Guardian reported that vessel traffic in the Strait of Hormuz doubled over the previous 24 hours, reaching its highest level since late February, according to CNN and MarineTraffic data. South China Morning Post reported that hundreds of ships were blocked inside the Gulf after the US and Israel started attacks on Iran on February 28, and that all cargoes loaded since late February have now sailed towards their final destinations.

Iraqi oil has been a significant beneficiary. South China Morning Post, citing tanker tracking data compiled by Bloomberg, reported that vessels carrying about 14 million barrels of Iraqi oil exited the Gulf in the latter part of June, the equivalent of about 1.4 million barrels a day over a 10-day period, and are now carrying crude to buyers in Asia, Europe and the US. Al Jazeera added that more than 20 million barrels of Iranian crude have been ready to sail for at least seven days.

The cost of insuring vessels has also fallen sharply. TASS, citing the Financial Times, reported that war risk insurance premiums for vessels have dropped from around 5% to 2% of the ship’s value after accounting for discounts. For large tankers, this translates to cost savings of hundreds of thousands of US dollars, the report said.

Despite these positive signs, analysts remain cautious. Al Jazeera noted that a lasting recovery depends on reaching a final pact, and that economies around the world "aren’t out of the woods just yet," with mines still needing to be cleared and damaged energy infrastructure repaired. The Guardian quoted Susannah Streeter, chief investment strategist at the Wealth Club, who said that while fears of a long-lasting global energy crunch are receding, caution remains as the knock-on effects of a record-breaking heatwave and weak growth in Europe collide.

In addition, Al Jazeera reported alarm over weakening oil demand, driven mainly by China slashing imports. Morgan Stanley cut oil forecasts for the second time in two weeks, warning of the risk of a glut—a severe oversupply of crude that outpaces consumer demand. Analysts say such a forecast is contingent on Chinese imports remaining low and the fragile truce holding, the report added.

Perspectives

Iran's viewpoint: As reported by Al Jazeera, Tehran argues that the wording of the interim deal allows it to keep control of the Strait in joint accord with Oman, indicating a degree of leverage over the waterway.

Analysts' caution: Several outlets quoted financial analysts and strategists who, while acknowledging the price drop, highlighted ongoing risks. Ipek Ozkardeskaya of Swissquote told The Guardian that a combination of strategic inventory releases, a collapse in demand from China, and tankers leaving the Gulf "dark" had contributed to a small oversupply. Susannah Streeter of the Wealth Club also warned of lingering caution in European markets.

Insurers' wariness: According to TASS, sources speaking to the Financial Times noted that insurers and shipowners remain cautious, with cargo insurance costs virtually unchanged and reports of potential sea mines emerging in certain areas along routes through the Strait.