Oil prices fall below pre-Iran war levels as fears grow of global crude oversupply

Oil prices have fallen below their levels before the outbreak of the Iran conflict, as traders increasingly bet that a surge in crude supplies could outweigh lingering geopolitical risks in the Middle East.

Brent crude, the international benchmark, dropped as low as $72.24 a barrel on Thursday, slipping beneath the $72.48 closing price recorded on the eve of US and Israeli strikes against Iran in late February.

The decline marks a dramatic reversal from the sharp price spikes seen during the conflict, which raised fears of severe disruption to global energy markets.

The price of a barrel of oil peaked at $120 in April, well below the worst forecasts of some analysts.

Motoring groups say it usually takes about ten days for oil price falls to feed into the price at petrol pumps.

The latest fall comes as hopes of a lasting peace agreement between Washington and Tehran continue to improve market sentiment. Progress in negotiations has encouraged more oil tankers to resume voyages through the strategically vital Strait of Hormuz, easing concerns over supply bottlenecks.

Shipping data indicates traffic through the waterway has rebounded strongly. According to MarineTraffic figures reported by CNN, vessel movements through the Strait of Hormuz doubled over the past 24 hours to reach their highest level since late February.