Oil prices have collapsed back to levels seen before the recent geopolitical escalation, as physical flows through the Strait of Hormuz show clear signs of returning to normal.
The United States stated on Thursday that tanker traffic in the critical chokepoint is nearing pre-conflict volumes, a development that has swiftly erased the risk premium that had buoyed energy markets in recent weeks.
Brent crude fell sharply in the session, shedding the gains accumulated during the peak of the shipping disruption fears.
The price action reflects a rapid repricing of supply risk; traders are no longer pricing in a sustained blockage of the strait, which handles roughly a fifth of global oil consumption.
The normalization of shipping activity has removed the immediate threat to global energy flows, allowing prices to settle based on fundamental supply and demand rather than geopolitical anxiety.
The market shift coincides with a diplomatic push by the United States to stabilize relations in the region.