Oil prices retreated on Thursday after U.S. President Donald Trump indicated that planned military action against Iran had been called off, fueling expectations that a broader de-escalation in the Middle East could reduce risks to global energy supplies.
Brent crude, the international benchmark, fell to as low as $89.46 a barrel, its weakest level since mid-April, before stabilizing near the $90 mark. The decline followed comments by Trump on social media suggesting that previously discussed military strikes had been canceled, while also hinting at the possibility of a peace agreement that could ease regional tensions.
The move weighed on energy markets more broadly, with European natural gas futures dropping by as much as 4%. The decline reflected reduced concerns over potential disruptions in the Strait of Hormuz, a critical shipping route through which roughly one-fifth of the world’s oil and gas supplies pass.
U.S. benchmark West Texas Intermediate (WTI) crude for June delivery fell to $87.06 a barrel, down 0.74%, with trading volumes reaching 267,491 contracts. July WTI futures also declined 2.6% to $87.71 a barrel in New York trading.
Meanwhile, August Brent futures settled 2.9% lower at $90.38 a barrel, while front-month Brent contracts experienced sharper losses, falling 3.71% to $89.65 a barrel amid elevated trading activity.
Refined fuel markets also weakened. June heating oil futures slipped 0.56% to $3.49 a gallon, while gasoline futures for June delivery fell 0.74% to $3.08 a gallon. Natural gas futures for June 2026 remained largely unchanged at $3.09.
Latest Oil Prices:
WTI Crude $86.77 -0.94 -1.07%
Brent Crude $89.52 -0.86 -0.95%
Murban Crude $87.25 -2.74 -3.04%
WTI Midland $87.21 -0.90 -1.02%
Opec Basket $97.18 -1.74 -1.76%
Indian Basket $92.58 +0.03 +0.03%
Natural Gas $3.075 -0.012 -0.39%
Gasoline $3.071 -0.030 -0.97%
Heating Oil $3.477 -0.036 -1.03%
The latest decline underscores how quickly geopolitical risk premiums can evaporate when tensions show signs of easing. Energy markets had rallied in recent weeks amid fears that escalating confrontation between Washington and Tehran could threaten shipping lanes and disrupt crude exports from the region.
Analysts noted that the pullback was driven by a combination of reduced concerns over military escalation, profit-taking after previous gains, and expectations of higher global supply in the coming months.
Despite the recent weakness, oil prices remain above levels seen before the latest flare-up in tensions. However, crude has now fallen more than 25% from peaks reached during the height of the conflict.
Market participation has also thinned. Open interest in Brent crude futures has dropped to its lowest level since March 2025, suggesting investors are reducing exposure and limiting risk amid continued uncertainty.
Although a permanent peace agreement has yet to emerge, alternative logistical arrangements have helped prevent severe disruptions to global oil supplies.
Shipping activity through the Strait of Hormuz has increased in recent weeks, improving crude flows after periods of near standstill. Trump claimed that more than 100 million barrels of oil had passed through the waterway since the start of a U.S. operation aimed at safeguarding maritime navigation in the region.
Nevertheless, underlying supply fundamentals remain tight. U.S. crude inventories, including the Strategic Petroleum Reserve, reportedly fell by 15 million barrels last week and by more than 70 million barrels over the past five weeks, marking the sharpest drawdown since the 1980s.
Fuel inventories in Singapore have also fallen to their lowest level since 2013, highlighting ongoing pressure on global energy stockpiles despite recent improvements in supply routes.
Investors are also monitoring developments in the U.S. economy ahead of next week’s Federal Reserve meeting.
New data showed weekly jobless claims rose to 229,000, exceeding Reuters forecasts of 219,000. At the same time, producer prices increased more than expected in May, while consumer inflation accelerated to its highest level in three years, driven largely by higher energy costs.
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