WTI Crude Drops Below $90 as Strait of Hormuz Reopens

West Texas Intermediate (WTI) futures settled below $90 per barrel for the first time since late March, reflecting a sharp reduction in the geopolitical risk premium. The price decline follows an official announcement from Iran that the Strait of Hormuz—a critical artery for global energy shipments—will remain fully open to commercial traffic for the duration of the current cease-fire between Israel and Lebanon. The impact on pricing has been immediate and pronounced. WTI futures have recorded a 19% decline throughout the month of April as traders priced out the possibility of a total blockade in the region. Despite this monthly slump, the commodity remains significantly higher on a yearly basis, maintaining a 44% gain since the start of the year. While the reopening of the strait has sparked a wave of optimism among market participants, some analysts are urging caution. Experts warn that the current euphoria may be premature, suggesting that long-term stability in the Middle East remains fragile and that the road toward lower price targets, such as $70 a barrel, depends on sustained diplomatic progress. From a market perspective, the easing of tensions reduces the immediate threat of a supply shock, shifting the focus back to fundamental demand and production levels.