From Escalation to Restraint: Oil Market Reacts to De-escalation in the Gulf

After spiking above $77 per barrel, oil prices fell below $70 by June 24 as fears of a U.S.–Iran escalation eased. Iran’s measured retaliation—a missile strike on a U.S. base in Qatar—avoided wider conflict and signaled restraint. This tempered market fears of disruption in the Strait of Hormuz, a key oil transit route. Diplomacy via Oman, Qatar, and EU actors also helped cool tensions, especially between Iran and Israel. As a result, traders quickly unwound risk premiums, triggering a 7% price drop within 48 hours. The episode highlights how geopolitical signaling can swiftly reshape energy markets.