Brent crude futures have retreated to levels last seen before the escalation of tensions in the Persian Gulf, as shipping activity through the Strait of Hormuz returns to normal patterns.
The removal of the risk premium that had buoyed energy prices over recent weeks marks a significant shift in market sentiment, with traders adjusting positions to reflect the de-escalation of immediate supply disruption fears.
The price correction follows a period of heightened volatility driven by concerns over potential blockades and military incidents in the chokepoint.
With no new reports of attacks on commercial vessels or military confrontations, the market has rapidly repriced the probability of a sustained supply shock.
This development aligns with earlier observations that the initial spike in oil prices was largely speculative, driven by geopolitical anxiety rather than actual physical shortages.
The stabilization of Brent crude provides some relief to global inflation concerns, which had been exacerbated by the prospect of higher energy costs.