Oil Holds Near Pre-War Levels

Crude oil prices were trading near $68.5 on Thursday, recovering from a 2% decline earlier in the session as traders sought to secure supplies ahead of the extended U.S. Independence Day weekend. Still, prices remained at their lowest level since February 27, as shipping activity through the Strait of Hormuz continued to recover steadily and investors remained hopeful that a permanent peace deal between the U.S. and Iran could be reached. The United Arab Emirates restored its exports to more than 3.9 million barrels per day, while Saudi Arabia ramped up oil exports to Asia, bringing total daily flows through the Strait of Hormuz above 10 million barrels. Meanwhile, President Donald Trump said U.S.-Iran negotiations were progressing well after mediators from Qatar and Pakistan concluded separate meetings with U.S. and Iranian negotiators in Doha on Wednesday.

Crude oil prices declined by around 2% to nearly $67 per barrel on Thursday, extending losses for the third straight session to pre-war levels as maritime supply through the Strait of Hormuz rapidly expanded. The United Arab Emirates restored its exports to over 3.9 million barrels daily, pushing total daily Hormuz flows past 10 million barrels. This surge, combined with ongoing emergency reserve releases and ad hoc Saudi sales to Asia, has created a market surplus. Meanwhile, upcoming peace talks in Qatar face delays due to the funeral of Iran's former Supreme Leader Ali Khamenei, which begins on July 4. Geopolitical friction remains high, as Tehran demands maritime control over the strait, while US President Donald Trump reiterated his stance against Iran acquiring nuclear weapons. Meanwhile, US data showed total domestic oil stockpiles fell to their lowest levels since March 2025 after twelve consecutive weeks of drawdowns.

Crude oil fell below $68 per barrel on Thursday, reaching its lowest level since late February as oil shipments through the Strait of Hormuz continued to increase and investors welcomed signs of progress in indirect US-Iran talks. A US official said crude flows through the strategic waterway exceeded 10 million barrels per day with support from the American military. The UAE’s oil exports have also returned to pre-war levels through workarounds. Meanwhile, Iranian oil exports jumped above 40 million barrels following the lifting of a US naval blockade, while record Russian shipments contributed to a significant buildup in seaborne inventories. At the same time, President Donald Trump praised the progress in negotiations, and Qatar said the next round of talks would be held as soon as possible. However, Tehran continued to insist on retaining maritime administrative control over the strait.