Oil prices are at their lowest since the Middle East conflict

Closing the June 24 trading session, Brent crude oil dropped nearly 4% to below 75 USD per barrel. This is the lowest level since the US and Israel launched air strikes against Iran in late February.

Meanwhile, US crude oil WTI also decreased by 3.5%, currently about 71 USD per barrel. This development is in contrast to a month ago, when oil prices exceeded 100 USD a barrel.

The market went down in the context of the US and Iran starting a 60-day peace negotiation period with the expectation that the energy flow through the Strait of Hormuz would return to normal. Investors’ concerns about the possibility of supply disruption have eased.

Also on Wednesday, US President Donald Trump said that US consumers have not fully benefited from the deep decline in crude oil prices in recent weeks.

“Oil and gas corporations have not reduced retail gasoline prices commensurate with the decline in oil prices they are buying. That means people still have to bear high prices,” Mr. Trump wrote on the social network Truth Social. He added that he had asked the US Department of Justice (DOJ) to urgently look into this issue.

However, Ms. Karen Young, senior research expert at the Center for Global Energy Policy at Columbia University, said that gasoline prices in the US depend on crude oil and many taxes of state and local governments. Along with that, the process of adjusting prices from crude oil to petrochemical refining and then to gas stations often takes a certain amount of time.

“Normally it takes a few weeks for crude oil price drops to be reflected in prices at refineries and then to consumers. Therefore, gasoline prices cannot decrease immediately in line with crude oil,” Ms. Young explained.