Oil Edges Downward as Hormuz Supply Offsets Slow Progress in Iran Talks
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Oil prices declined on Friday, heading for a weekly loss as market participants balanced ongoing diplomatic gridlock between the U.S. and Iran against the steady flow of crude through the critical Strait of Hormuz.
Brent crude futures fell by 52 cents, or 0.6%, to settle at $89.18 per barrel by 1419 GMT. Meanwhile, West Texas Intermediate (WTI) crude futures dropped by $1.01, or 1.2%, to $82.52 per barrel. Both global benchmarks were on track for weekly losses, with Brent down approximately 5.5% and WTI shedding 5.2%.
According to Rystad analyst Janiv Shah, the market has been caught off guard by increased crude flows, the Iran-Oman shipping corridor, and U.S. assertions regarding mine clearance. Shah noted that the weekly drop reflects the volume of oil successfully navigating the Strait of Hormuz, allowing Asian refineries to maintain steady purchasing and consumption.
Earlier in the week, the United States implemented what it described as its most severe sanctions to date against Iran. Tehran dismissed the measures as a hostile, inhumane action that has lost its impact. At the same time, international mediators are working to ensure the Strait of Hormuz remains fully open. Following discussions with a Qatari envoy regarding freedom of navigation, Iranian authorities agreed to draft a list of conditions required to restore regular shipping traffic.
Fluctuating Shipments Through Key Chokepoints
Despite some recovery, maritime traffic through the Strait of Hormuz—which historically handled one-fifth of global oil supply—remains inconsistent. Preliminary shipping data indicated that only seven commodity vessels transited the strait on Thursday, down from 17 the previous day and below the 10-day average of 15. Meanwhile, 17 commodity vessels passed through the Bab el-Mandeb chokepoint.
Goldman Sachs estimated recent oil exports from the Gulf at 15 million to 16 million barrels per day (bpd). While this is 7 million to 8 million bpd lower than pre-conflict levels, it represents an increase of 5 million to 6 million bpd from the lows recorded in March.
PVM Oil Futures analyst John Evans highlighted that broader market questions—including OPEC membership dynamics, Chinese demand, and global refining constraints—remain deeply tied to the ongoing geopolitical conflict.
U.S.-Venezuela Negotiations and Geopolitical Risks
In other developments, Trump administration officials are reportedly negotiating a deal to secure long-term access to Venezuela’s crude reserves, which could eventually reduce domestic oil import costs. Additionally, reports indicate that Venezuela is contemplating withdrawing from OPEC.
Geopolitical risks also intensified in Europe after Russia warned it might target British military installations both within and outside Ukraine. This warning followed Ukraine’s use of UK-supplied long-range missiles to strike Russian territory. However, Donald Trump downplayed the threat, stating that Russian President Vladimir Putin would not attack a NATO member state, dismissing reports that CIA Director John Ratcliffe had issued a warning to Moscow regarding such an escalation.
In the ongoing conflict, Ukraine’s General Staff confirmed on Friday that its military successfully targeted a Russian oil refinery in the Yaroslavl region overnight.
