Brent crude oil prices fell below $71 per barrel on Thursday for the third consecutive day, driven by progress in U.S.-Iran negotiations on reopening the Strait of Hormuz and a recovery in Gulf oil shipments.
As of 17:28 Turkish time, international benchmark Brent crude was trading at $70.76, down around 1.13%. That level signaled prices had returned to pre-war territory.
The decline followed a statement on Wednesday by a Qatari Foreign Ministry spokesperson, who said the parties had made 'positive progress' in Doha talks focused on reopening the Strait of Hormuz. Later that day, U.S. President Donald Trump told reporters that 'the process of denuclearizing Iran is going well'.
On Thursday, however, a threatening statement from Iran's joint military command ratcheted up tensions again. The command announced it would deliver an 'immediate and coercive response' to ships that deviate from designated routes in the Strait of Hormuz. The statement, carried by Iranian state television, declared: 'Should the Islamic Republic of Iran's navigation protocols in the Strait of Hormuz be violated, the designated route be deviated from or these rules be disregarded, the armed forces will deliver an immediate and coercive response that jeopardizes the safety of the offending vessel.' It was not immediately clear what prompted the threat.
The next round of U.S.-Iran negotiations is expected to take place after the funeral of Iran's Supreme Leader, Ayatollah Ali Khamenei, which begins on Saturday.
Meanwhile, Gulf states' oil exports have continued to recover in recent days. Saudi Arabia has increased its shipments through the Strait of Hormuz as conditions have gradually improved. According to vessel tracking data compiled by Bloomberg, four supertankers carrying roughly 8 million barrels of crude oil departed from the kingdom's main export terminal at Ras Tanura on Thursday, sailing into the Arabian Sea. That marked the highest number of supertankers to transit the strait in a single day since the memorandum of understanding signed on June 17.
The United Arab Emirates (UAE) also accelerated its exports. According to Kpler vessel tracking data, the country's oil exports in June exceeded 3.9 million barrels per day. The UAE, which left OPEC in May, achieved its highest export rate since 2017.
According to a U.S. official who spoke to Bloomberg, total oil flow through the Strait of Hormuz has risen to over 10 million barrels a day. While that figure represents a significant recovery from the lows seen during the conflict, it remains well below the pre-war era, when an average of 18 to 19 million barrels a day passed through the waterway.
After the United States and Israel launched attacks on Iran on February 28, Tehran retaliated against U.S. assets in the region, Israel and neighboring Gulf states, including their critical energy infrastructure. Additionally, Iran's Revolutionary Guards restricted commercial shipping through the Strait of Hormuz. The strategic waterway, through which about one-fifth of the world's oil and liquefied natural gas shipments pass in peacetime, was almost entirely closed once the war began. Fueled by supply fears, oil prices climbed as high as $115 a barrel in early May.
After Iran and the United States signed a 14-article memorandum of understanding on June 17 to permanently end the war, shipments through the strait gradually recovered. Nevertheless, despite the ceasefire, sporadic attacks continue to disrupt maritime traffic. The parties are now engaged in an intensive 60-day negotiation process aimed at fully reopening the strait, halting hostilities and limiting Tehran's nuclear program.
