Crude oil prices concluded the second quarter with their sharpest decline since 2020, driven largely by market optimism surrounding a potential peace agreement between the United States and Iran. Brent crude shed roughly 40% of its value during the period, reflecting investor expectations that geopolitical tensions in the Middle East could ease and restore normal energy flows through critical shipping lanes.
However, according to ING commodity strategists Warren Patterson and Ewa Manthey, current market sentiment may be getting ahead of the fundamentals. Tanker traffic through the Strait of Hormuz remains significantly constrained, with total crossings—measuring both inbound and outbound movements—hovering near 11 on recent trading days, well below the peak of 24 recorded the previous week. The persistence of reduced shipping volumes suggests that supply chain disruptions have not yet normalized despite diplomatic progress.
The disconnect between market pricing and on-the-ground conditions underscores the risk of a premature pullback in crude values should geopolitical tensions resurface or shipping patterns fail to recover at the pace investors are anticipating. Traders should monitor Hormuz transit data closely as a leading indicator of whether the rally in energy prices is truly justified by improving fundamentals.