Benchmark crude oil prices fell more than $3 on Wednesday, sliding to their lowest levels since before the start of the Iran war in February.
The sell-off was driven by a rapid normalization of shipping activity through the Strait of Hormuz, as stranded tankers began exiting the waterway and commercial flows resumed at near-pre-conflict volumes.
US Energy Secretary Chris Wright confirmed that crude oil flows through the strategic chokepoint are now similar to what they were before the conflict began.
The administration further stated that Iran no longer possesses the capacity to close the Strait of Hormuz, a claim made as commercial shipping returned to near-normal levels.
This official assessment has significantly reduced the geopolitical risk premium that had been embedded in energy prices since February.
The normalization of flows follows a period of intense market volatility and supply disruption fears.