Oil prices eased in Asian trading on Friday and remained on course for a third consecutive weekly drop as improving tanker flows through the Strait of Hormuz and optimism over a preliminary U.S.-Iran peace accord outweighed fresh security concerns after a cargo ship was struck near Oman.
As of 20:21 ET (00:21 GMT), Brent futures for August delivery were down 0.5% at $74.89 per barrel. West Texas Intermediate (WTI) futures also slipped 0.5%, trading at $71.58 per barrel.
For the week, both Brent and WTI were on track to record losses of roughly 7%, deepening the declines set in motion by last week's preliminary U.S.-Iran peace deal. That agreement had helped ease shipping disruptions in the region, a key factor in the recent price retreat.
Prices had rallied by more than 2% in the previous session after a projectile hit a cargo vessel transiting near the Strait of Hormuz, reviving concerns over the security of a vital global energy chokepoint. The incident prompted the United Nations' International Maritime Organization to suspend its efforts aimed at facilitating safe passage for vessels and crews in the area.
U.S. officials later said Iran had fired on the ship, a development that raised questions about the durability of the preliminary accord between Washington and Tehran that had contributed to reopening the waterway after months of disruption.
Despite the attack, tanker traffic through the strait has continued to recover. Crude shipments through the Hormuz corridor climbed this week to their highest level since the conflict began earlier this year, supporting expectations of more stable flows should a broader settlement take hold.
Benchmark Brent has pulled back markedly from peaks above $90 per barrel seen earlier in the month, as market participants increasingly price in the prospect that a wider U.S.-Iran settlement could normalize shipments from the region. Analysts also noted, however, that many vessels remain cautious: a number are still avoiding Iranian waters and instead routing closer to Oman, a sign of lingering security risk.
Summary of market drivers:
- Improved tanker volumes through the Strait of Hormuz have eased near-term supply concerns.
- Optimism about a preliminary U.S.-Iran peace deal has weighed on oil prices.
- Incidents such as the projectile strike near Oman have temporarily revived security-related price volatility.