Oil prices fall as markets price in faster reopening of Hormuz

Oil prices fell on Thursday as markets reacted to signs that the Strait of Hormuz could reopen faster than expected, easing some of the supply shock that had driven energy prices higher during the conflict.

Brent crude and West Texas Intermediate both moved lower after reports that the United States and Iran signed an interim memorandum of understanding that would reopen the strait and lift the U.S. naval blockade on Iranian ports. Traders were pricing in the possibility that more oil could move through one of the world’s most important shipping chokepoints.

U.S. gasoline prices also eased. AAA data showed the national average fell below $4 a gallon for the first time since March, reflecting the market’s immediate reaction to the prospect of additional supply reaching global markets.

Market reaction

The Wall Street Journal reported that oil prices dropped to their lowest levels since the conflict began, with Brent around $78.62 a barrel and WTI around $74.64. The move reflected a sharp reduction in the risk premium as investors reassessed how quickly shipping through Hormuz might resume.

The price response came even though the agreement remains provisional. Market participants are still weighing whether the reopening will hold and how much crude can actually flow in the near term.

Ships begin transiting again

AP reported that stranded ships have begun transiting the Strait of Hormuz again, citing maritime data and identifying major operators including Grimaldi Group, Cosco, Knutsen and NYK among those resuming passage.

The development is a concrete sign that the market is not waiting for full normalization before adjusting prices. Even a partial reopening can add meaningful supply back into the system, especially when traders had been braced for a prolonged disruption.

What remains unresolved

The route is not fully back to normal. Reporting says the central corridor of the strait is still constrained, and that full shipping recovery may take weeks or months even if the broader diplomatic opening holds.

Other uncertainties remain in place as well. Insurers, tanker operators and oil buyers still have to judge how much security risk remains on the waterway and how quickly routing patterns can return to normal.

There is also the issue of Iran’s next move. The Guardian reported that Tehran plans to impose maritime fees on ships passing through the strait in two months, which could become a new point of friction even if the current arrangement stabilizes.

What comes next

The next few hours and days will show whether more tankers resume transits, whether mine-clearing and blockade removal continue as promised, and whether Brent, WTI and gasoline keep easing or rebound on implementation doubts.

For now, the key market signal is relief. Oil and gasoline prices are falling because traders see a faster reopening of Hormuz as a near-term supply boost, but the underlying shipping and security risks have not disappeared.