Crude Oil Trades Near Four-Month Low as Strait of Hormuz Traffic Normalizes
Oil prices fell below $69 per barrel as maritime flows through the Strait of Hormuz continued recovering and OPEC+ signaled additional production increases, marking a dramatic reversal from April's wartime peak.
Supply Normalization Pressures Prices Lower
Crude oil traded below $69 per barrel on Monday, hovering near its lowest levels since late February as recovering energy flows through the Strait of Hormuz and expectations of higher OPEC+ output fueled concerns over a potential supply glut. Crude oil traded above $69 per barrel on Tuesday, but remained close to its lowest levels in more than four months as signs of rising supply continued to weigh on prices, while vessel traffic through the Strait of Hormuz kept recovering.
OPEC+ Continues to Unwind Production Curbs
OPEC+ members approved a quota increase of 188,000 barrels per day for next month, continuing a progressive unwinding of long-standing production curbs as market conditions normalize, with major Persian Gulf producers rapidly accelerating output and Saudi exports approaching pre-war levels, while the United Arab Emirates, which exited OPEC during the recent regional conflict, has fully restored its shipping flows, and oil and gas tanker traffic through the Strait of Hormuz showed signs of normalizing after several vessels made unexplained U-turns and detours along the critical energy route.
From Record Disruption to Market Oversupply
West Texas Intermediate front-month futures prices rose from near $57 per barrel at the beginning of the year to a peak of $113 in April before recently falling to $76. The International Energy Agency estimated that the oil market would be oversupplied by nearly 4 million barrels per day in 2026, with prices expected to end the year lower than they started.
Asian Demand and Price Adjustments
Reports showed that at least eight Japan-linked ships exited the strategic waterway via a route near Iran, including five supertankers capable of carrying 2 million barrels of crude each, and meanwhile, Saudi Arabian oil giant Saudi Aramco cut the price of its Arab Light crude for Asian buyers next month by $11 a barrel to a $1.50 discount against the regional benchmark, reflecting softer market conditions.
Road Ahead
With the Strait of Hormuz becoming progressively safer for shipping and producers accelerating output, energy markets face a prolonged period of abundant supply that could keep downward pressure on prices throughout the second half of 2026.