Global oil prices ease as hopes grow for uninterrupted shipping through Hormuz

Global oil prices ended lower on Friday as investors became increasingly optimistic that shipping through the Strait of Hormuz could gradually return to normal following signs that tensions between the United States and Iran may be easing.

Despite the decline at the close of trading, both major oil benchmarks recorded solid weekly gains as markets continued to reflect the impact of recent military exchanges between Washington and Tehran.

Brent crude settled at $76.01 a barrel, down 29 cents, or 0.38 per cent, while US West Texas Intermediate (WTI) crude finished at $71.41 a barrel, falling 67 cents, or 0.93 per cent.

Even with Friday’s losses, Brent rose around 5.5 per cent over the week, while WTI gained almost 4 per cent, supported by concerns that conflict in the Middle East could disrupt global energy supplies.

Market participants appeared encouraged by expectations that diplomatic efforts could reduce the risk of further escalation.

Analysts said investors were also becoming more confident that shipping through the Strait of Hormuz, one of the world’s most important energy corridors, would not remain disrupted for an extended period.

John Kilduff, a partner at Again Capital, said the market had responded positively to the absence of fresh negative developments, suggesting traders believed the conflict was unlikely to worsen significantly.

Phil Flynn, a senior analyst at Price Futures Group, said crude prices had retreated as investors increasingly expected the United States to ensure that the Strait of Hormuz remained open despite recent military tensions.

The waterway is a critical route for global energy trade, carrying around 20 per cent of the world’s daily oil and gas supplies before the latest conflict began on 28 February.

Although liquefied natural gas carriers have continued to transit the passage in recent days, ship-tracking data indicates that overall traffic remains below normal levels.

Oil prices also gave up earlier gains after reports that Qatari negotiators had travelled to Iran for discussions aimed at reducing tensions and creating conditions for wider diplomatic talks.

Meanwhile, Iranian media reported several explosions in southern parts of the country, including areas near Bushehr, home to one of Iran’s nuclear power facilities.

The latest developments followed Iranian strikes on US military infrastructure in Gulf states on Thursday, launched in response to earlier American attacks on targets in Iran’s southern coastal and eastern regions.

Analysts said the lack of additional US military action overnight helped calm markets, although uncertainty over shipping through the Strait of Hormuz continued to provide support for oil prices.

US President Donald Trump said this week that he did not expect the conflict to resume, adding that any future developments would be resolved quickly.

Daniel Hynes, a commodity strategist at ANZ, said markets also took some reassurance from Washington’s decision not to target Iranian oil facilities during its recent military operations, reducing fears of an immediate disruption to energy production.

The International Energy Agency (IEA) warned that the recent escalation between the United States and Iran could alter its outlook for the global oil market, which had previously forecast a sizeable supply surplus in 2027.

Separately, the agency lowered its forecast for Russian oil production, citing continued Ukrainian attacks on the country’s energy infrastructure.

Industry sources said repeated drone strikes had forced major refinery shutdowns, reducing Russian petrol production to roughly 65 per cent of its usual seasonal consumption level.

While markets have become more optimistic about diplomatic progress, traders remain alert to developments in the Middle East, with the security of the Strait of Hormuz continuing to play a central role in shaping global oil prices.