Brent and WTI decline as Gulf ceasefire hopes pressure crude

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Brent and WTI decline

Highlights

Brent traded near $73.51, while WTI was around $70.28.
Both benchmarks are on track for a monthly decline.
Traders are watching possible U.S.-Iran talks in Doha.
China's demand concerns continue to weigh on crude prices.

Prices pull back near pre-war levels

Brent crude traded around $73.51 a barrel, down 0.10%, while West Texas Intermediate (WTI) was near $70.28, down 0.18%, according to market data shown Tuesday. The continued decline in Brent and WTI points to a further drop in oil prices over the month. Brent crude is about $20 below last month’s closing level, while WTI has fallen by about $17 compared with its May 29 close. This marks a significant reversal of the geopolitical premium that had been built into oil prices during the early stages of the U.S.-Iran conflict, Reuters reports.

The central question for traders is whether tensions in the Gulf can continue to ease. Reports of possible discussions in Doha have encouraged expectations that a pause in fighting could hold, but the diplomatic picture remains unclear. Iran has signaled that talks on transit routes through the Strait of Hormuz may take place with Oman, while also saying there are no planned negotiations with the United States in the coming days.

Hormuz traffic improves, but risk has not disappeared

Shipping through the Strait of Hormuz has recovered despite recent attacks on vessels and renewed strikes between the U.S. and Iran. Traffic last week reached its highest level since the conflict began, suggesting that energy flows are continuing even as military and political risks remain.

That matters because the Strait of Hormuz is a critical route for global oil and LNG shipments. Any sustained disruption would likely push prices higher, especially for Asian importers dependent on Middle Eastern supplies.

At the same time, weaker demand signals are limiting any rebound. Analysts remain cautious about China, the world’s largest crude importer, where a clear recovery in buying has yet to appear. Without stronger Chinese demand, oil prices may struggle to sustain gains even if geopolitical risks remain elevated.

Diplomacy now drives the oil risk premium

Oil’s decline shows that traders are removing part of the war premium from prices. Brent and WTI are now close to pre-war levels, even though the ceasefire remains fragile and shipping risks have not fully disappeared.

The next move may depend less on current supply and more on whether diplomacy produces credible de-escalation. If talks in Doha or related discussions reduce the risk of disruption in Hormuz, prices could remain under pressure. If the ceasefire breaks down or vessel attacks intensify, the market could quickly rebuild a premium. For now, investors are treating lower prices as a bet that energy flows will continue.

We have previously highlighted that Trump says Strait of Hormuz will remain open and toll-free.

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