Oil ​prices extended their decline on Thursday to near levels last seen before the start of the ‌Iran war, as rising supply expectations from the Middle East outweighed demand concerns.

Prompt-month Brent crude futures for August delivery fell $1.22, or 1.65%, to $72.52 a barrel as of 0337 GMT, while US West Texas Intermediate lost $1.02, or 1.45%, to $69.32 a barrel.

Both contracts hit their lowest since ​February 27.

August Brent was trading lower than September, which was priced at $73.59, signalling ample short-term supply.

“The speed of ​this decline has caught plenty off guard as markets price in a much faster return ⁠of Middle Eastern barrels than most had anticipated just a fortnight ago,” IG analyst Tony Sycamore said in a ​note.

Brent had fallen more than $3 on Wednesday as supply concerns eased, and WTI settled down nearly $3.

US Energy Secretary Chris Wright told ​a forum on Wednesday that flows through the Strait of Hormuz were close to what they were before the start of the Iran war, saying at least 20 million barrels had exited the strait in the last 24 hours.

He added that a return to complete ​normalcy would take a few weeks because the strait needs to be demined.

Rising Middle Eastern supply, together with Iran ​set to boost sales following a temporary reprieve from US sanctions, drove down prices of physical crude oil cargoes around the world.

An initial accord ‌last ⁠week to end the US-Israeli war with Iran, which began on February 28, has allowed traffic through the strait to restart.

The accord set up a 60-day period of negotiations to tackle more difficult issues, including Iran’s nuclear programme.

Wright said oil would continue to flow through the strait even if the deal did not hold, and that Iran would ​not be able to close ​it again.

Oman on Wednesday ⁠opened temporary routes to ease tanker departures from the Strait of Hormuz, with the International Maritime Organisation and Omani authorities coordinating movements.

Qatar’s prime minister visited Oman for talks on initiating ​negotiations over the strait’s future management with Iran, Iraq and Gulf states.

Macquarie analysts expected ​oil to ⁠normalise quickly toward pre-war levels as supply chains adapt and the Strait of Hormuz reopens.

They forecast Brent and WTI prices to average $67 and $62 per barrel, respectively, in the third quarter, down from the second quarter’s average of $94 and $87 per barrel.

US total crude ⁠stocks hit ​their lowest since 1984 last week, the Energy Information Administration said on ​Wednesday, driven by strong refining demand and government oil releases from its emergency reserve.

Markets, however, appeared unfazed by the EIA data as traders ​focused on the Strait of Hormuz.