The Hormuz Strait is open for navigation! 35 million barrels of stranded crude oil are allowed to flow out to sea, completely wiping out all the price increases from the Middle East war.

Notice that global oil supply is expected to improve as oil tankers trapped in the Persian Gulf for months begin to leave the Strait of Hormuz, wiping out all the price gains during the war on Thursday. US crude oil futures for August delivery fell by 1.66% to around $69 per barrel; Brent crude oil futures fell by 1.79% to below $73 per barrel, with prices hovering around levels seen before the outbreak of the Middle East war in late February. According to data from trade tracking company Kpler, more than 20 oil tankers carrying around 35 million barrels of crude oil have passed through the Strait of Hormuz since the US and Iran reached an agreement to reopen this key shipping route. During the early stages of the conflict, Iran actually closed the waterway, causing these non-Iranian vessels to be stranded in the Persian Gulf for over three months. It is expected that most of these ships will arrive at their destinations in Asia in early August. Citibank stated that the worst period for commodity arbitrage strategies may be over. During the US-Iran war, this strategy faced severe setbacks as the prices of near-term oil contracts soared, severely impacting trades that shorted near-term contracts and bought long-term contracts. The bank stated that the cooling of major tensions is now its baseline scenario and expects Brent crude oil prices to fall to $60 to $65 per barrel in the next 6 to 12 months as shipping flows through the Strait of Hormuz return to normal. It also added that any temporary rebound in summer oil prices should be used to "short at highs." However, the Islamic Revolutionary Guard Corps (IRGC) Navy of Iran warned on Thursday that only ships following the designated route specified by Tehran are allowed to safely pass through the Strait of Hormuz, highlighting that risks still exist in this key waterway. The IRGC also added that ships violating transit instructions will "face action."