📈 Global Oil Prices Tumble Towards Pre-War Levels as Strait of Hormuz Reopens

Oil prices extended their sharp decline on Thursday, hitting their lowest levels since late February. The rapid drop comes as Middle Eastern supply returns much faster than anticipated following an initial accord to end the U.S.-Israeli war with Iran. • Market Impact & Prices: Brent crude futures for August fell by 1.65% to US$ 72.52 a barrel, while U.S. West Texas Intermediate (WTI) dropped 1.45% to US$ 69.32 a barrel. August Brent is trading lower than September, signaling ample short-term supply. • Supply Restoration: The Strait of Hormuz is rapidly normalizing, with at least 20 million barrels exiting the strait in a 24-hour window. Demining operations are underway to reach full normalcy within weeks. • Sanctions & Logistics: Iran is set to boost sales following a temporary reprieve from U.S. sanctions. Additionally, Oman has opened temporary routes to ease oil tanker departures. • Future Forecast: Analysts expect prices to normalize quickly. Brent is forecast to average US$ 67 per barrel and WTI at US$ 62 per barrel in Q3, a steep drop from Q2 averages of US$ 94 and US$ 87 respectively. _Context for Sri Lanka_: As a net oil-importing nation, a sustained drop in global crude prices toward the US$ 60–70 range will significantly ease pressure on Sri Lanka's foreign exchange reserves, reduce the national import bill, and help stabilize domestic energy and manufacturing costs.