Oil Prices Decline as Strait of Hormuz Route Gets Busy
Oil prices declined Friday as shipping activity through the Strait of Hormuz continued to recover following the ceasefire between the US and Iran, easing concerns over disruptions to global crude supplies and reducing the geopolitical risk premium.
The international benchmark Brent crude traded at $74.08 per barrel, down about 1.9% from the previous close of $75.50. US benchmark West Texas Intermediate (WTI) fell about 2.1% to $70.41 per barrel, compared with $71.92 in the previous session.
Data from analytics firm Kpler showed that 70 commercial vessels transited the Strait of Hormuz on June 24, the busiest day since Feb. 28.
Traffic more than doubled from the previous day, with supertankers carrying at least 11 million barrels of crude departing mainly from ports in the United Arab Emirates, Saudi Arabia, Iraq and Iran.
The strategic waterway, through which around one-fifth of global oil supplies normally pass, saw traffic plunge after the outbreak of the US-Israel-Iran conflict on Feb. 28.
Daily ship crossings, which averaged about 130 before the conflict, fell to 78 on the first day of fighting and at one point dropped nearly 90% below pre-conflict levels.
Shipping activity has steadily recovered since Washington and Tehran reached a 14-point agreement on June 14 to end the conflict through negotiations, with a ceasefire taking effect on June 18.
Before the conflict, roughly 20 million barrels of oil moved through the Strait of Hormuz each day, including around 15 million barrels of crude and 5 million barrels of refined petroleum products.
Despite the improvement in shipping activity, geopolitical risks remained in focus after the UK Maritime Trade Operations (UKMTO) agency said Thursday that a cargo vessel was struck by an unidentified projectile off the coast of Oman, damaging its bridge. No injuries or pollution were reported.
Asked about the reported attack, a US official said Washington was aware of the incident and was assessing the reports. “President Trump has been clear that Iran cannot subvert the free flow of traffic in the Strait,” the official said on condition of anonymity.
Analysts said the recovery in tanker traffic has strengthened expectations that oil exports through the Strait of Hormuz will continue without major disruption, keeping downward pressure on prices despite lingering regional tensions.
They added that shipping activity through the Strait of Hormuz and broader geopolitical developments in the Middle East are likely to remain the main drivers of oil prices in the near term, while investors are also monitoring the potential impact of recent earthquakes on Venezuela’s oil production.
