U.S. oil futures drop over 2%, trading at $70.46 per barrel

U.S. crude oil futures fell over 2% on Wednesday, trading at $70.46 per barrel, as optimism grew around the evacuation of vessels stranded in the Strait of Hormuz. The International Maritime Organization announced that Iran and Oman would coordinate the release of over 11,000 seafarers, signaling normalization of global energy supplies. This development, combined with ongoing U.S.-Iran peace negotiations, has eased concerns over supply disruptions in the region.

West Texas Intermediate (WTI) crude futures dropped 3.8% to $70.43 per barrel, with prices briefly dipping below $70 earlier in the day. Meanwhile, Brent crude futures fell 3.1% to $73.13 per barrel, marking lowest level since conflict began. The decline in oil prices has also translated to lower gasoline prices, with the national average falling to $3.93 per gallon, down for the sixth consecutive week.

Despite the positive developments, experts caution that full normalization of tanker traffic could take up to six months, and Middle Eastern energy infrastructure repairs may require up to two years. Additionally, the recent attack on a vessel near the Omani coast has raised new security concerns, potentially complicating the recovery of oil flows.

Market participants remain focused on the broader supply outlook, with Iraq threatening to leave OPEC unless its production quota is increased. In the U.S., crude oil stockpiles remain below operational requirements, at approximately 19 million barrels.