Oil Tumbles Below $72; Strait of Hormuz Reopens After Ceasefire

Brent crude futures fell below $72 a barrel on Monday. The Strait of Hormuz reopened after a fragile ceasefire between Iran and the United States. The decline extended a slide that began with the announcement of the truce, removing the immediate risk of a supply disruption through the world's most important oil chokepoint.

The strait handles roughly one-fifth of global oil production. Its closure during the recent escalation had pushed Brent above $75, adding a risk premium that traders now see unwinding. With shipping resuming, the market has repriced the chance of a sudden supply gap. US crude slipped below $68.

The ceasefire itself is tentative. Neither side has disclosed full terms. Past truces have collapsed within days. The resumption of tanker traffic through Hormuz could be reversed quickly if hostilities resume. That keeps a floor under prices, though the immediate pressure is downward.

For import-dependent economies like India and Japan, lower oil costs offer a reprieve. India's crude import bill had risen sharply during the disruption. A sustained drop below $70 would also ease inflation expectations globally, giving central banks more room on rate policy.

Some traders are already looking past the ceasefire to the broader supply picture. OPEC+ is scheduled to meet next month. Saudi Arabia has signaled it may raise output to reclaim market share. A return of Iranian barrels, if sanctions are eased as part of a broader deal, would add even more supply. The combination of Hormuz reopening and potential OPEC+ increases could push Brent toward the low $60s, several analysts said.