Markets are balancing recovering Gulf oil flows against lingering uncertainty over the pace of supply normalization.

Oil prices rose more than 2% on Thursday after four consecutive sessions of declines, although benchmarks remain below levels seen before the Iran conflict as markets continue to assess the pace of supply recovery across the Gulf.

Brent crude settled at USD 75.26 per barrel, while US benchmark West Texas Intermediate closed at USD 71.92. The rebound follows a broader pullback in oil prices as crude exports through the Strait of Hormuz have steadily resumed in recent weeks.

Why You Should Care

The Strait of Hormuz handles roughly one-fifth of global oil consumption, making it one of the world’s most strategically important energy corridors. As a result, even limited disruptions can quickly influence market sentiment and commodity prices.

While oil prices remain below pre-conflict levels as Gulf exports recover, markets continue to respond quickly to any signs that supply normalization could face delays.

For businesses, investors, and policymakers across the MENA region, the pace of that recovery matters. More stable oil flows could ease pressure on energy prices and shipping costs. Meanwhile, sustained progress in regional supply could strengthen expectations that global oil markets will become better balanced heading into 2026.

The Details

The recovery comes after an interim agreement between the United States and Iran earlier this month encouraged commercial shipping to return to the waterway. 

The deal included provisions allowing free navigation through the Strait of Hormuz in exchange for the easing of US restrictions on Iranian ports, helping restore millions of barrels of oil supply to global markets.

Despite improving shipping activity, markets remain cautious about how quickly supply can fully normalize. Some vessels have delayed or adjusted planned transits through the Strait of Hormuz, while maritime authorities continue to advise commercial operators to exercise caution in the area.

The latest price movement follows a sharp decline in oil throughout June after fears of prolonged supply shortages eased. Crude had climbed above USD 125 per barrel during the height of the conflict before retreating as demand softened. 

Several major producers are already preparing for higher exports. Saudi Arabia has resumed sending tankers toward its Ras Tanura export terminal inside the Persian Gulf. Additionally, Qatar issued its first crude sales tender since the conflict began, and Iraq is seeking a higher production quota from OPEC as regional production gradually recovers.

The Ripple

The gradual recovery of Gulf oil flows could help stabilize fuel prices and shipping costs if current export trends continue. At the same time, markets remain highly sensitive to any developments that could affect one of the world’s most critical energy corridors.

The return of supply is also reinforcing expectations that the market could shift back toward a more balanced supply-demand outlook after months of disruption, offering businesses and investors greater visibility over energy costs.

What to Watch

The next phase for oil markets will depend less on recovering production and more on whether Gulf exports continue to normalize over the coming weeks.

Investors will also be watching progress in US-Iran negotiations alongside production decisions from major oil exporters, both of which will shape how quickly global supply returns to pre-conflict levels and whether expectations of a looser oil market in 2026 continue to build.