Oil Prices Slump on De-escalation Rumors Despite Ongoing Hormuz Closure

Key Facts

1Investors are selling Brent and WTI contracts following news of US-Iran de-escalation.

2Current prices do not fully reflect the severity of supply disruptions in the Strait of Hormuz according to IEA estimates.

3Iran closed the Strait of Hormuz on February 28, 2026, threatening 11% of global oil supply.

Global oil markets are experiencing a significant sell-off in Brent and WTI contracts as traders react to speculative reports of a potential de-escalation between the US and Iran. This downward movement occurs despite the ongoing closure of the Strait of Hormuz since February 28, 2026, a move that threatens approximately 11% of global oil supplies. According to IEA estimates, current market prices fail to fully account for the severity of physical supply disruptions in the region. Analysts suggest that market sentiment is currently driven by rumors rather than the fundamental reality of a 9 million BPD supply deficit. Consequently, this bearish pressure may prove temporary as long as the core geopolitical crisis involving the critical waterway remains unresolved.