Benchmark oil prices fell more than $3 on Wednesday to their lowest level since before the start of the Iran war as supply concerns eased with more stranded oil tankers exiting the Strait of Hormuz. U.S. crude futures, meanwhile, slipped below $70 a barrel, the lowest level since March 2. Brent crude futures, the global benchmark, were down $3.42, or 0.4%, at $73.65 a barrel as of 1445 GMT, and U.S. West Texas Intermediate slipped $3.32, or 4.6%, to $69.87 a barrel.
Brent touched a low of $73.22, its weakest level since February 27, the day before U.S.-Israeli strikes on Iran.
Three stranded tankers carrying 5 million barrels of crude oil were exiting the Strait of Hormuz on Wednesday, with two heading to Asia, shipping data showed, as the interim deal between Iran and the U.S. unlocks more supply stuck in the Gulf. Physical crude oil cargoes were selling at discounts across the globe, changing trade flows as markets come under pressure from fast-rising Middle Eastern supply with Iran set to boost sales following a temporary reprieve from U.S. sanctions.
"While there are early encouraging signs of increased tanker activity, the market is pricing in the broader scenario of Iranian oil re-entering the global market and the Strait of Hormuz normalising," said Tim Waterer, chief market analyst at KCM Trade.
"If sanctions are eased, Iranian production and exports could ramp up relatively quickly given the substantial amount stored on tankers — we are likely talking weeks rather than months," Waterer added. Oman said it would keep the Strait of Hormuz open to shipping without imposing tolls and had designated two temporary routes north and south of the existing shipping lane to facilitate the safe passage of vessels leaving the region. Prices have also come under pressure this week from the 60-day sanctions waiver Washington granted Tehran after initial peace talks, allowing Iran to sell oil, and from an easing of hostilities in Lebanon. Uncertainty remains over the durability of the U.S.-Iran accord, however. U.S. President Donald Trump said on Tuesday that Iran had agreed to nuclear inspections into "infinity", although Tehran said it had made no such concession.
"Markets are currently assigning too much confidence to a favourable outcome without fully discounting the risks associated with unresolved nuclear issues and inspection disputes," said Mark Malek, CIO at Siebert Financial. However, U.S. inventories remained tight on strong refining demand and amid a release of oil from the government's emergency stash. U.S. crude stocks, including commercial and those in the Strategic Petroleum Reserve, fell by 15.1 million barrels to 743.3 million barrels in the week ended June 19, the EIA said, the lowest level since 1984. Fuel inventories rose meanwhile. U.S. gasoline stocks rose by 2.1 million barrels compared with analysts' expectations in a Reuters poll for a 0.6 million-barrel draw. Distillate stockpiles, which include diesel and heating oil, rose by 3.1 million barrels, versus expectations for a 0.5 million-barrel drop, the EIA data showed.
J.P. Morgan on Wednesday lowered its second-half 2026 Brent crude oil price forecast due to lower-than-expected OECD commercial inventory draws and softer demand for oil.
The bank sees Brent averaging $86 per barrel in the third quarter and $80 in the last quarter. Elsewhere, Moscow's oil refinery will be offline for at least six months after suffering extensive damage in Ukrainian drone attacks, two industry sources said on Wednesday.
