**Oil Prices Return to Pre-War Levels Amid Increased Middle East Supply**
*Published on June 25, 2026*
Oil prices have experienced a significant decline, reaching levels not seen since before the onset of the Iran war. This drop is primarily attributed to rising supply expectations from the Middle East, which have overshadowed ongoing concerns regarding demand.
As of 06:39 GMT on June 25, Brent crude futures for August delivery fell by $1.06, or 1.44%, settling at $72.68 a barrel. Meanwhile, US West Texas Intermediate (WTI) saw a decrease of 76 cents, or 1.08%, bringing the price down to $69.58 a barrel. Both benchmarks hit their lowest points since February 27, reflecting a broader trend of declining prices in the oil market.
The market dynamics indicate an ample short-term supply, as evidenced by the trading pattern where August Brent was priced lower than September contracts, which were at $73.59. This situation follows a notable drop in prices earlier in the week, with Brent falling over $3 and WTI declining nearly $3.
US Energy Secretary Chris Wright highlighted the recent developments, stating that oil flows through the Strait of Hormuz have nearly returned to pre-war levels, with approximately 20 million barrels having exited the strait in just the past 24 hours. However, he cautioned that achieving complete normality would take several weeks, as the strait still needs to be cleared of mines.
The easing of supply concerns has been bolstered by a recent agreement aimed at resolving the US-Israeli conflict with Iran, which began on February 28. This accord has facilitated the resumption of maritime traffic through the Strait of Hormuz, a critical chokepoint for global oil shipments. The agreement includes a 60-day negotiation period to address more complex issues, including Iran's nuclear program.
Despite the ongoing negotiations, Wright expressed confidence that oil would continue to flow through the strait, even if the deal were to falter. He asserted that Iran would be unable to close the strait again, which is considered an international waterway. In response to the changing dynamics, Iran has indicated plans to implement maritime service fees, which it prefers to call fees rather than tolls, while the US maintains that such charges are unwarranted.
In an effort to facilitate smoother tanker movements, Oman has opened temporary routes to assist with departures from the strait. This initiative is being coordinated by the International Maritime Organization and Omani authorities. However, tensions remain, as Iran's Revolutionary Guards have issued warnings against unauthorized crossings of the Strait of Hormuz, stating that non-compliant vessels "will be dealt with" and condemning the newly established routes.
As the situation continues to evolve, market participants are closely monitoring developments in the Middle East, particularly regarding supply levels and geopolitical tensions that could impact oil prices in the future.