Key Highlights

  • WTI crude oil fell below $70 per barrel, its lowest since early March, with prices now down roughly 40% from their wartime peak as Hormuz traffic recovers and UAE exports approach 85% of pre-war levels.
  • Trump announced there would be no tolls, insurance costs, or charges of any kind for tankers transiting the Strait of Hormuz, with shipowners now actively transiting with satellite signals following IMO safety guarantees.
  • Some domestic tightness persists, with the American Petroleum Institute reporting Cushing crude inventories fell by 1 million barrels, potentially dipping below critical minimum operating levels.

WTI crude oil fell below $70 per barrel on Wednesday, reaching its lowest level since early March as a combination of physical supply recovery, presidential diplomacy, and shipper confidence signals collectively accelerated the unwinding of the war premium that had driven prices to wartime highs roughly 40% above current levels.

Trump's announcement that no tolls, insurance costs, or charges of any kind would be levied on tankers transiting the Strait of Hormuz removes a commercial uncertainty that had been deterring some operators from resuming full transit activity even after the formal ceasefire. Combined with safety guarantees from the International Maritime Organization, the announcement has shifted shipper behaviour materially, with vessel owners now openly transiting the waterway with active satellite signals rather than the reduced transponder activity that characterised the conflict period.

The supply recovery data is concrete. The International Energy Agency estimates the UAE is exporting oil at nearly 85% of pre-war levels, having recently sold roughly 60 million barrels from the Persian Gulf. That volume, combined with the Saudi supertanker transits confirmed earlier in the week and Iran's own resumption of crude exports, represents a supply normalisation that the market is pricing through the current sharp decline in benchmark prices.

A partial offset to the bearish supply narrative comes from domestic US inventory data. The American Petroleum Institute reported a 1 million barrel decline in Cushing crude inventories, with levels potentially approaching critical minimum operating thresholds that would constrain pipeline and storage operations at the delivery point for WTI futures. That domestic tightness introduces a modest floor under the price decline but is unlikely to reverse the dominant direction driven by the much larger Hormuz supply recovery story.