Oil prices declined Thursday after U.S. Vice President JD Vance said more than 12 million barrels of crude oil transited the Strait of Hormuz overnight, signaling early progress in restoring energy flows following the U.S.-Iran agreement.

Key Highlights

  • Brent crude fell 1.8% to $78.11 per barrel, while WTI crude declined about 2% to $75.27.
  • Vice President JD Vance said tankers carrying more than 12 million barrels crossed the Strait of Hormuz overnight.
  • The U.S. and Iran signed an agreement aimed at restoring shipping access through the key energy chokepoint.
  • Analysts caution that oil flows remain well below pre-conflict levels and supply disruptions persist.
  • Market participants remain focused on the pace of recovery rather than current inventory shortages.

Oil prices moved lower on Thursday after signs emerged that energy shipments through the Strait of Hormuz were beginning to recover following a U.S.-Iran agreement aimed at ending the recent conflict in the Middle East.

Brent crude futures fell 1.8% to $78.11 per barrel, while West Texas Intermediate (WTI) crude declined about 2% to $75.27. The losses came after U.S. Vice President JD Vance told reporters that tankers carrying more than 12 million barrels of oil successfully crossed the Strait of Hormuz overnight.

According to Vance, the volume represented the highest level of tanker traffic since the conflict began. He also said Iranian forces had not targeted ships in the strait for a second consecutive night and that both Washington and Tehran were honoring the initial terms of their agreement.

President Donald Trump and Iranian President Masoud Pezeshkian signed a deal Wednesday intended to restore commercial shipping through Hormuz. Under the arrangement, Iran agreed to allow vessels to transit the strait without tolls for 60 days, while the United States would ease its naval restrictions in the region.

The Strait of Hormuz remains one of the world's most important energy chokepoints. Before the conflict, approximately 14 million barrels of crude oil and 6 million barrels of refined petroleum products moved through the waterway each day.

Despite the optimism, shipping data suggests a full recovery remains distant. Commodity intelligence firm Kpler reported that traffic had not yet increased significantly, although several Saudi tankers carrying roughly 6 million barrels had become visible in the Gulf of Oman. Analysts noted that many shipping companies remain cautious about re-entering the region.

Market observers also warned that the reopening of Hormuz does not immediately solve broader supply issues. Rapidan Energy Group President Bob McNally said millions of barrels remain trapped in the region and described the agreement as a temporary truce rather than a permanent resolution.

Meanwhile, Energy Aspects founder argued that oil markets have largely stopped trading on traditional supply-and-demand fundamentals. Despite historically low inventory levels that would normally support higher prices, traders are instead focusing on how quickly shipping flows can normalize.

Analysts expect a gradual recovery rather than an immediate return to pre-conflict conditions. While vessels stranded during the disruption are beginning to move, industry experts believe shipping activity could take weeks or months to fully normalize.

For now, the market appears to be pricing in reduced geopolitical risk rather than tightening physical supplies, sending oil prices lower as traders bet that the worst-case disruption scenario may have been avoided.