Brent crude for August delivery shed approximately 1.5% on Thursday, slipping below the $72.48 per barrel closing price recorded before the outbreak of the Iran conflict.
The decline marks a notable shift in market sentiment, as the benchmark crude reverts to pre-war valuation levels after a period of elevated volatility driven by geopolitical fears.
The price action suggests that the initial supply shock associated with the conflict has been largely absorbed by the market.
While the immediate threat to shipping lanes in the Strait of Hormuz remains a structural risk, traders appear to be discounting the probability of a prolonged disruption.
The retreat below the pre-conflict baseline indicates that the risk premium previously embedded in oil prices is evaporating as diplomatic channels remain open and no major escalation has occurred.
This development follows a period where oil prices had stabilized just above their pre-conflict baselines, reflecting a market that had digested the initial shock but remained wary of the diplomatic road ahead.