Crude oil benchmarks are on track to record a fourth consecutive weekly decline as traders rapidly unwind the geopolitical risk premium that had propped up prices.
The sell-off is driven by tangible evidence that shipping activity through the Strait of Hormuz is stabilizing, removing the immediate supply disruption fears that had dominated energy markets in recent weeks.
Brent and WTI have extended their losses, moving closer to pre-conflict levels as stranded tankers begin to exit the chokepoint.
The normalization of transit flows follows an initial accord aimed at de-escalating tensions, signaling to the market that the acute phase of the shipping crisis is abating.
With the physical threat to global oil flows diminishing, the speculative buffer built into energy prices is evaporating.
The downward pressure is compounded by expectations of increased supply from OPEC+.