Brent crude falls to pre-war levels as US-Iran peace boosts Hormuz oil flows

Brent crude oil prices have fallen back to pre-war levels following a significant increase in oil flows through the Strait of Hormuz. This development comes after an interim peace agreement between the United States and Iran, which has led to the reopening of the strategic waterway. The agreement, signed on June 17, 2026, includes a 60-day period of toll-free passage through the strait, resulting in approximately 20 million barrels of oil passing through in the last 24 hours. This surge in oil flows has effectively neutralized the supply shock that had previously driven Brent crude prices to a peak of $126.41 per barrel in April 2026.

The market for the normalization of traffic through the Strait of Hormuz by the end of June reflects this development. The market’s current pricing suggests a 5.2% probability of achieving normal traffic levels, as indicated by an IMF PortWatch 7-day moving average. This represents a notable increase from a mere 2% probability just 24 hours ago. The increase in oil flows and progress in peace negotiations appear to support scenarios where traffic through the strait normalizes by the end of June.

The broader geopolitical context continues to influence market dynamics, with key actors including the IMF, U.S. and Iranian government leaders, and maritime operators closely monitoring the situation. The easing of U.S. sanctions on Iranian oil sales has further contributed to the market’s response, as market participants assess the implications for global oil supply and regional stability.

Key Takeaways

• Market pricing suggests an increased likelihood of normalized traffic through the Strait of Hormuz by the end of June, with current probabilities at 5.2% for a YES resolution.
• Recent developments, including the interim peace agreement and increased oil flows, are consistent with scenarios supporting the normalization of strait traffic.
• Brent crude oil prices have declined back to pre-war levels, indicating the impact of increased oil flows and reduced geopolitical tensions.

What to Watch

Observers should monitor further announcements from the IMF PortWatch team regarding traffic levels in the Strait of Hormuz, as these could influence market probabilities. Any additional diplomatic moves or agreements between the U.S. and Iran could also impact market perceptions of regional stability and oil supply dynamics. Watch for potential shifts in shipping insurer policies, as these could provide further evidence of normalization in the strait.

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Disclosure: This article was edited by Estefano Gomez. For more information on how we create and review content, see our Editorial Policy.