Oil price falls to pre-Iran war levels as more tankers exit Strait of Hormuz

Brent crude fell back below its prewar level on Wednesday as more tankers resumed moving through the Strait of Hormuz, easing at least some of the market panic that followed the Iran war disruption.

The drop came as shipping through the narrow waterway, one of the world’s most important oil chokepoints, continued to recover on a new route along Oman’s coast. But the reopening remains fragile: Iran is still contesting the arrangement and has warned that vessels outside routes declared by Tehran are prohibited.

Traffic improves

AP reported that 78 vessels transited the strait on Wednesday, the highest daily total since the war began, though still well below the prewar average of 130 or more. The news agency also said 125 vessels crossed the strait last week, up from 33 the week before, according to Lloyd’s List Intelligence.

The Financial Times reported that 31 tankers left the Gulf on Wednesday, a near 50% increase from the day before, based on Windward ship-tracking data. FT put Brent crude at $72.40 a barrel, while The Guardian reported it at $72.24.

The move in prices followed the improving flow of tankers, suggesting traders were pricing in a less immediate risk of interruption. That does not mean the market is back to normal. Transit remains below prewar levels, leaving oil prices sensitive to any renewed disruption.

How the route changed

Several tankers were using a new route through the Strait of Hormuz along Oman’s coast. AP said the corridor was promoted by a U.N. maritime agency and Oman, and that the United States and Iran had reached an initial agreement to open the strait and extend a shaky ceasefire in the conflict.

AP also reported that U.S. Secretary of State Marco Rubio said the U.S. and Gulf allies would ensure no fees were charged on ships using the strait. That message appeared aimed at reinforcing confidence that the route would stay open, at least for now.

The renewed traffic is important because the Strait of Hormuz is a critical passage for global oil and gas flows. Any sustained reopening would ease supply fears and reduce pressure on inflation, especially if tanker counts keep rising.

Iran pushes back

Iran is not accepting the new arrangement. AP reported that the Islamic Revolutionary Guard Corps naval arm called the route "unacceptable and completely dangerous" and said vessel traffic outside routes declared by Iran was prohibited.

AP said Iran warned violators would be dealt with and that one tanker was threatened over radio on Wednesday. The Financial Times separately reported that Iran turned back at least four tankers using the IMO-linked evacuation corridor and said only its own routes were authorized.

That dispute is the core risk in the story. The market is reacting to better traffic, but the route remains politically fragile because the competing claims over who controls transit are unresolved.

What the market is watching

For traders, the immediate signal was that supply fears had eased enough to push Brent back to the prewar range. That matters because Gulf shipping and insurance costs can rise quickly when the strait looks vulnerable.

For oil consumers, the lower price is a welcome relief after the shock from the war. But the improvement is not yet firm enough to remove the risk premium entirely.

The main question now is whether more tankers continue to use the Omani route without incident. Another question is whether Iran limits itself to warnings or escalates to boarding, interception or other direct action at sea.

Investors are also watching whether Brent holds below the prewar level or rebounds if security fears return. Further statements from the U.S., Iran, Oman or the International Maritime Organization could quickly shift the market again.