Oil prices near pre-war levels — but persistent supply risks could spark a rebound, analysts warn

Oil prices have fallen back sharply to near pre-war levels over recent weeks in response to a fragile truce between the U.S. and Iran, and diplomatic efforts to bring the conflict to a lasting conclusion. However, commodity strategists warned Monday that prices could reflect an overly optimistic stance from markets, which are underestimating the scale of persistent supply-side challenges. Analysts argue that shipping traffic through the Strait of Hormuz is unlikely to swiftly return to pre-war levels, even after a pickup in activity following the U.S.-Iran ceasefire agreement, as Tehran seeks to exert leverage over the critical chokepoint. Strait of Hormuz traffic normalization Nikos Petrakakos, managing director of investments at Tufton Investment Management, said many shipping companies remain wary of sending vessels back through the key energy chokepoint, citing uncertainty over the peace framework, lingering concerns over sea mines and elevated war-risk insurance premiums. "Even though there is some more motion going on, in general, we're nowhere near being back to where it was," Petrakakos told CNBC's "Europe Early Edition" on Monday. International benchmark Brent crude futures were trading at $72.45 per barrel as of 8:42 a.m. ET on Monday, compared to a wartime-high of over $188 per barrel in late April. Amrita Sen, founder and director of research at Energy Aspects, said markets may be underestimating how far shipping conditions remain from their pre-war norm. …