At the start of May, oil markets were still pricing in elevated geopolitical risk and expectations of sustained supply disruption.
But easing tensions between Washington and Tehran, along with improving supply expectations, have rapidly shifted sentiment back toward fundamentals.
📉 Brent crude has fallen back to around $71–74 per barrel
📊 Prices are now close to pre-conflict levels after a drop of more than 35% since early May
⚖️ The market is reassessing whether the geopolitical risk premium has been fully removed
The debate is now split between two clear narratives.
📉 Bearish case: supply is recovering and demand remains uneven
📈 Bullish case: geopolitical risks in the Strait of Hormuz are still not fully priced in
The key question for markets is whether oil has already priced in good news — or whether volatility is simply paused, not gone.
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