Global oil prices extended their decline on Thursday, July 2, 2026, as easing geopolitical tensions in the Middle East and the gradual reopening of shipping through the Strait of Hormuz continued to ease concerns over supply disruptions. West Texas Intermediate crude fell 58 cents, or 0.85 percent, to $68.00 per barrel, while Brent crude — the international benchmark — dropped $1.78, or 2.45 percent, to $71.162 per barrel.
Murban crude, the benchmark for Middle Eastern exports, posted the steepest decline, tumbling $3.37, or 4.88 percent, to $65.64 per barrel. The sharp fall in Murban crude, widely used as a pricing benchmark for Asian refiners, signals improving confidence that Gulf-based exports will continue flowing despite lingering regional tensions.
The latest selloff comes after oil prices surged during the recent U.S.-Iran conflict, when fears that Iran could block the Strait of Hormuz — a vital shipping lane that carries roughly one-fifth of the world’s oil supply — triggered a geopolitical risk premium across energy markets. That premium has since largely eased following the June 17 U.S.-Iran Memorandum of Understanding, which committed both sides to restoring commercial shipping through the Strait of Hormuz as part of broader ceasefire and de-escalation efforts.
Shipping traffic through the waterway has begun to recover, although vessel movements remain well below pre-conflict levels. According to Gulf News, Hormuz traffic is rebounding slowly despite the ceasefire, but remains well below pre-conflict levels. Analysts say the decline in oil prices also reflects growing expectations that physical oil supplies will remain largely uninterrupted, while major producers continue pumping at elevated levels.
Investors are now shifting their focus from geopolitical risk to underlying market fundamentals, including global demand, inventories, OPEC+ production policy, and U.S. output. The Dallas Fed Energy Survey, released June 24, showed Texas oil and gas activity jumping to its strongest level since 2022, with executives on average expecting WTI prices of $81 per barrel at year-end 2026. However, if shipping through the Strait of Hormuz continues to normalize, traders say crude prices could remain under pressure unless a fresh supply disruption or stronger-than-expected global demand emerges.
For the UAE, which has positioned itself as a stable energy supplier and logistics hub, the normalization of Hormuz traffic is particularly significant. The country’s ports at Khor Fakkan and Fujairah have helped maintain supply chain flows during the conflict, with developers like DAMAC Properties reporting that the government’s efforts to keep ports open prevented major disruptions. The recovery of Hormuz shipping could further support UAE’s role as a reliable conduit for Gulf energy exports, even as oil prices settle lower in a less volatile geopolitical environment.
