Oil Prices Hit Lowest Level Since the Iran War Began

Oil prices fell to their lowest point since the war with Iran broke out. August Brent futures dropped 1.8% to $75.68 a barrel, the lowest since February 27, the day before the attack on Iran. West Texas Intermediate also declined 1.7% to $71.87 a barrel. During the war, oil had climbed as high as $120 a barrel.

The drop was attributed in part to understandings between the United States and Iran that led to the gradual reopening of the Strait of Hormuz, which had been effectively closed since the start of the war. According to the International Maritime Organization, more than 11,000 vessels that had been stuck in the Persian Gulf will begin passing through the strait.

IMO Secretary-General Arsenio Dominguez said the transit would be carried out “in close cooperation with Iran, Oman and all the coastal states, the United States and the shipping industry.”

Against this backdrop, US President Donald Trump attacked major oil companies, saying they were not cutting fuel prices quickly enough. “The big oil companies are not lowering the prices at the gas stations to match the much lower prices they are paying for oil. These prices are dropping,” he wrote on social media. “I have instructed the Justice Department to begin looking into this conduct. Gas prices should be coming down faster than I am seeing so far.” Experts said the process is not that simple, because the pass-through depends largely on refineries and usually takes several weeks before crude prices affect gasoline prices at the pump. Caroline Yang of Columbia University’s Center on Global Energy Policy told CNBC that oil prices first fall, then refinery prices follow, and only later do consumers see the change.