Oil prices extend slide: Brent crude falls below $77 as Iran ceasefire holds, Strait of Hormuz fears ease

Crude oil prices extended losses in Asian trading on Wednesday (June 24) as easing fears of supply disruptions in the Middle East outweighed lingering geopolitical tensions, with traders betting that the fragile ceasefire between Israel and Iran would hold and keep oil flowing through the Strait of Hormuz.

As of 12:58 pm Tokyo time on Wednesday, Brent crude — the international benchmark — fell 79 cents, or 1.02%, to $76.29/barrel, while US West Texas Intermediate (WTI) dropped 80 cents, or 1.09%, to $72.41 a barrel, according to market data provided by the user.

Other benchmarks also traded lower, reflecting broad weakness across the energy complex.

Murban crude declined 1.64% to $69.63; the OPEC Basket fell 1.89% to $81.59, while Russia's Urals crude slid 3.24% to $64.42.

Natural gas futures also edged lower.

The declines build on Tuesday's sharp selloff, when oil posted its biggest one-day loss in nearly following the announcement that the US and Iran had signed a memorandum of understanding (MoU), easing fears that the conflict would disrupt exports from the Arabian Gulf.

The market's attention has shifted away from military tensions toward the physical supply outlook.

Iran has so far kept oil exports flowing, and shipping traffic through the Strait of Hormuz — a strategic waterway that carries roughly one-fifth of the world's oil consumption — has continued despite heightened military activity in recent days.

Analysts said traders are unwinding the "war premium" that briefly pushed Brent crude above $120/barrel.

With no significant interruption to production or tanker movements, investors are reassessing the likelihood of a sustained flow of supply.

The weaker oil prices also reflect expectations that major producers, including members of the OPEC+ alliance, will continue maintaining ample supplies while global demand growth remains uneven amid economic uncertainty in China and other large consuming nations.

Despite Wednesday's decline, analysts cautioned that oil markets remain highly sensitive to developments in the Middle East.

Any renewed attacks on energy infrastructure, escalation involving Iran, or disruption to shipping through the Strait of Hormuz could quickly reverse the recent selloff and send prices higher again.