Brent crude slid a further 1 percent on Wednesday to trade at $76.30 a barrel, its lowest since early March, while West Texas Intermediate dropped to $72.43. The decline extends a week-long sell-off that has unwound most of the war premium built in since the US–Iran conflict began, after ship-tracking data confirmed a sharp increase in tanker crossings through the Strait of Hormuz and Washington issued a temporary sanctions waiver allowing Iranian oil sales.

The mechanism is straightforward: the Strait of Hormuz, which normally carries about a fifth of global oil consumption, had seen daily transits collapse to a fraction of the pre-war average of 138 vessels. Since a memorandum of understanding was signed on 17 June, at least 172 ships have made the passage, including 42 on Saturday alone, according to maritime intelligence firm Kpler. Three supertankers that had been stranded for weeks moved through on Tuesday, and the UN’s International Maritime Organization announced an evacuation plan for hundreds of vessels and 11,000 seafarers still inside the Gulf. The US Treasury’s general licence, valid until 21 August, permits the sale of Iranian crude and petrochemicals, adding to the sense that physical supply can normalise. Analysts in Tokyo and London note, however, that traffic remains well below pre-conflict levels, and the northern route through Iranian waters is being used almost exclusively, as the central shipping lanes are still subject to mine-clearance operations.

Market sentiment has pivoted from scarcity fears to cautious optimism, but the diplomatic picture is fractured. President Trump claimed on Tuesday that 19 million barrels flowed out of the strait on Monday and that Iran had agreed to indefinite nuclear inspections; Tehran publicly denied any such concession. Oman and Iran are forming a joint working group on future navigation administration, while US Secretary of State Marco Rubio, visiting Gulf allies, insisted no country may levy transit fees on an international waterway. Iran’s Persian Gulf Strait Authority, itself under US sanctions, has declared that no vessel may pass without its permit, and a Revolutionary Guards source told the Fars agency that daily transits would be capped. These contradictory signals are holding some shipowners back, even as the ceasefire in Lebanon has removed another layer of regional risk.

Viewed from Beijing, the price trajectory also reflects China’s role as a buffer. Chinese refiners drew down strategic and commercial reserves estimated at over 1 billion barrels during the conflict, curbed fuel exports, and accelerated the switch to electric vehicles, absorbing a supply shock that by historical precedent might have sent prices above $200. That demand-side adjustment, analysts at Societe Generale noted, is a key reason crude did not replicate the 134 percent spike seen during the 1973 embargo. The next factual milestones are the durability of the 60-day ceasefire framework, progress in nuclear negotiations that could push prices back to pre-war levels, and the US Energy Information Administration’s weekly inventory data due later on Wednesday, which will test whether the modest 765,000-barrel draw reported by the American Petroleum Institute is confirmed or revised sharply downward.