Brent's crude oil has fallen low since February

Brent's crude oil fell back in the vicinity of $75 per barrel, falling nearly 1.8 per cent in the daytime and falling low since February this year. The increase, which had previously been pushed up by the tension between the United States and Iran, has been largely repulsed.

Holmuz is back to normal.

The decline in the market was directly related to the improvement in crude oil transport in the Strait of Hormuz. It was reported that local oil tanker traffic remained stable, that the flow of crude oil was smoother than in the previous period, and that there was a decrease in geo-stress.

This means that the “war premium” that was included in oil prices in the previous period because of the risk of conflict is being rapidly squeezed out. As supply disruptions subsided, crude oil prices returned to areas closer to basics.

Inflationary pressures or abating as oil prices fall

The fall in oil prices has often helped to reduce inflationary pressures, with particular implications for transport, logistics and consumption-related costs. If current levels are maintained, it is expected that there will be some reduction in cost pressures in sectors such as aviation, transport and retail.

However, end-users do not necessarily immediately feel change. Fuel prices at gas stations tend to be adjusted more slowly, and it usually takes some time to move lower oil prices to the retail end.

Market concerns can be stable in low places.

Next, the focus of the market will shift to whether Brent crude oil will remain stable or weak in the current zone. If geo-risks continue to cool, oil prices may remain weak in the short term and price volatility may be magnified if transport and supply disturbances recur.