Brent sinks more than 4%, as Middle East risk premium fades

Oil prices remained under pressure in early Asian trading Thursday after investors continued unwinding the geopolitical risk premium that had driven crude prices higher during the recent Israel-Iran conflict, with global benchmarks posting steep losses as of 8:37 am Thursday (June 25) Tokyo time.

A market snapshot showed Brent crude trading at $73.74 per barrel, down $3.34, or 4.33%, while US West Texas Intermediate (WTI) fell to $69.90, down 44 cents, or 0.63%.

Other regional crude benchmarks also weakened.

Murban crude dropped 4.57% to $66.45, WTI Midland fell 4.09% to $70.66, Indian Basket crude slid 3.96% to $75.28, and Russia's Urals crude declined 3.24% to $64.42, according to the market data.

Refined fuel prices were also lower, with gasoline futures down 0.52% and heating oil off 0.64%.

US natural gas bucked the broader trend, edging up 0.31%.

The declines extend a sell-off that began after fears of a prolonged disruption to Middle East oil supplies eased.

Traders have increasingly shifted their focus away from the possibility of supply shocks through the Strait of Hormuz and back toward underlying market fundamentals, including ample global supply and demand expectations.

The sharp drop in Brentm — considered the international benchmark—suggests investors are removing much of the war-related premium that briefly pushed prices to multi-month highs earlier this month.

Despite the retreat, analysts caution that oil markets remain sensitive to geopolitical developments. Any renewed escalation involving Iran or disruptions to shipping in the Gulf could quickly reverse the recent declines.

As of Thursday morning in Asia, Brent remained above $73 a barrel while WTI hovered just below $70, indicating that although immediate supply fears have subsided, traders continue to price in a degree of uncertainty over the security of global energy flows.