Brent crude. The global benchmark. Fell to a low of $72.24 a barrel on Thursday, according to The Guardian, slightly lower than the day before the US and Israel launched missile attacks on Tehran on 28 February. Prices have fallen more than 20% this month. Meanwhile, Al Jazeera reported that prompt-month Brent crude futures for August delivery fell $1.06 (1.44 percent) to $72.68 a barrel by 06:39 GMT, while US West Texas Intermediate (WTI) lost 76 cents (1.08 percent) to $69.58 a barrel. Both contracts hit their lowest since February 27.

Supply Concerns Eased by Vessel Traffic

Vessel traffic in the strait of Hormuz, a vital shipping passage, doubled over the previous 24 hours to its highest level since late February, according to CNN and MarineTraffic data. Ipek Ozkardeskaya, a senior analyst at the banking group Swissquote, said news that vessels were now transiting the strait with their satellite signals switched on had helped push down the oil price. She added that a combination of strategic inventory releases, a collapse in demand from top buyer China, and a substantial number of tankers quietly leaving the Persian Gulf ‘dark’ had contributed to a small oversupply in some important markets.

US Energy Secretary Chris Wright told a forum that flows through the Strait of Hormuz were close to those before the start of the Iran war, with at least 20 million barrels having exited the strait in the past 24 hours. A return to complete normality would take a few weeks, however, because the strait needs to be cleared of mines, he added. An initial accord last week to end the US-Israeli war with Iran, which began on February 28, has allowed the resumption of traffic through the strait. The accord set up a 60-day period of negotiations to tackle tougher issues, such as Iran’s nuclear programme.

Impact on Global Markets and Inflation

The fall in oil prices has eased concerns about the prospect of another inflationary shock. Stock markets on both sides of the Atlantic were up on Thursday. The pan European Stoxx 600 hit a record high, as did the Dow Jones. In the UK, the governor of the Bank of England, Andrew Bailey, welcomed the easing tensions in the Middle East that have pulled down oil price to pre-Iran war levels. Susannah Streeter, the chief investment strategist at the platform Wealth Club, said: “Fears of a long-lasting global energy crunch induced by the Iran conflict are slinking away, with oil prices sinking back towards pre-crisis levels.”

TradingView reported that crude oil and gasoline prices settled mixed on Thursday, with crude falling to a 3.5-month low. The dollar index ($DXY) rallied to a 13-month high, which is bearish for crude oil prices. President Trump signed a preliminary deal to end the US-Iran war, which has reopened the Strait of Hormuz and allowed the restart of millions of barrels of oil exports, boosting global oil supplies. Goldman Sachs cut its price forecast on Brent crude to $80 a barrel in Q4 of this year, down from $90 a barrel, and said it expects Persian Gulf crude exports to return to pre-war levels by the end of July, one month earlier than previously expected.

Regional Fuel Price Trends and Pass-Through of Tax Cuts

In Germany, fuel prices have continued to fall, according to ADAC. The decline was especially pronounced for diesel, which cost 1.776 euros per liter on Wednesday, only three cents above the level on February 27. Super E10 averaged 1.84 euros per liter and was thus 6.2 cents more expensive than before the war began. The fuel, which will expire in two weeks, has been ‘largely, but not completely’ passed on to consumers, according to the Monopolies Commission. Of the 16.7 cents tax relief per liter, between 15 and 16 cents were passed on, depending on the fuel type, with between 100 and 200 million euros of the total 1.6 billion euros in tax cuts not reaching consumers. The industry association en2x emphasized that the tax cut will be passed on in full to customers, with intense price competition expected among the 14,000 gas stations in Germany.

The fuel price decline was especially pronounced in Northwest Germany, where the price drop was the highest at 16.7 to 17.3 cents per liter, while in the East it was just below the tax cut at 16 to 16.4 cents. The Monopolies Commission also noted that the fuel was passed on differently depending on the region. The Ifo Institute assumed an incomplete pass-through, especially with diesel. A portion of the 1.6 billion euros that the fuel has cost the state has ended up with the mineral oil companies, says Ifo expert Florian Neumeier. The state cannot dictate prices, and thus the pass-through of such a measure is not guaranteed. If this development continues, diesel could fall below the pre-war price level in the coming days, according to ADAC.