Crude falls as improving tanker traffic eases market jitters

Highlights

Oil prices declined as Hormuz traffic improved.
Brent remained below this week's highs.
Supply concerns eased despite regional tensions.

Brent crude traded at $84.99 a barrel, down 2.31%, while West Texas Intermediate (WTI) fell 2.82% to $81.58 a barrel. The latest losses extended the selloff that began earlier this week, when renewed hostilities between the United States and Iran briefly pushed Brent above $93 a barrel. Traders priced in the risk of severe supply disruptions through the Strait of Hormuz, CNBC reported.

Hormuz flows show signs of recovery

The latest pullback came after data pointed to a gradual recovery in shipping activity through the Strait of Hormuz, one of the world's most important energy corridors. According to Commonwealth Bank of Australia, crude traffic has recovered to roughly 30%–35% of pre-conflict levels after falling sharply during the recent escalation.

The bank said that if shipments recover to around 50%–60% of normal volumes, the global oil market could once again move toward oversupply, reducing the need for the geopolitical risk premium that has supported prices in recent weeks.

The Strait of Hormuz handles roughly one-fifth of global oil consumption, making any disruption to shipping one of the largest risks facing energy markets. As vessel movements gradually improve, investors appear increasingly confident that supplies will continue reaching international buyers despite ongoing regional instability.

Markets continue watching sanctions

Investors also monitored developments in Washington after President Donald Trump backed adding tariffs on Iran to a bipartisan sanctions proposal targeting both Iran and Russia. While existing sanctions enjoy broad congressional support, the tariff proposal introduces another layer of uncertainty for global trade and energy markets.

The economic impact on direct U.S.-Iran trade is expected to remain limited. Official trade data show the United States imported only about $1.4 million worth of Iranian goods in 2025, with artwork and collectibles accounting for more than half of that total.

Shipping remains the key market driver

Friday's decline illustrates that oil prices are currently being driven less by headlines than by evidence of physical supply. Brent has retreated from above $93 a barrel, but prices remain well above levels seen before the latest conflict began.

As long as shipping through the Strait of Hormuz continues to normalize, traders may gradually remove part of the war premium. However, any renewed disruption to one of the world's busiest energy routes could quickly reverse the recent decline.

As we previously reported, the widening Middle East conflict fuels the oil rally.

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