Brent falls below $74 despite renewed tensions near Strait of Hormuz

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Brent falls below $74

Highlights

Brent crude fell 2% to $73.58 per barrel, while WTI crude declined 2.06% to $69.97 per barrel.
A cargo ship near Oman was hit, but no casualties or environmental damage were reported.
Gulf flows through Hormuz have improved after diplomatic progress.
Iraq is seeking a higher OPEC quota, adding another supply question.

Prices fall despite Hormuz attack

Brent crude futures for August slipped 2% to $73.58 a barrel, while U.S. West Texas Intermediate (WTI) futures for August fell 2.06% to $69.97. The price drop points to another weekly decline after a sharp reduction in the war-risk premium that had previously supported prices during the conflict, Bloomberg reports.

The decline came even after a cargo ship near Oman was hit while operating close to the Strait of Hormuz. The vessel, reportedly sailing under a Singapore flag, recorded no casualties and no environmental damage. The incident briefly revived concern over safe passage through one of the world’s most important energy corridors, but vessels continued moving through the region.

The International Maritime Organization temporarily paused part of its evacuation plan to reconfirm safety guarantees for ships in the area. Several vessels had already been evacuated under the plan before the pause.

Supply narrative takes over

The larger force in the market remains supply. Tanker flows through Hormuz have accelerated after early progress in U.S.-Iran diplomacy, bringing millions of barrels back into the global market. That shift has helped push crude lower even as political tensions remain unresolved.

Earlier this week, oil exports from the Gulf were running at their fastest pace since the start of the war. Goldman Sachs estimated that Gulf oil exports are now close to two-thirds of normal levels, slowing the pace of global inventory draws.

That supply recovery has mattered more to traders than the latest political dispute between Washington and Tehran. Iran rejected U.S. claims that unfrozen assets would be used to buy American agricultural goods, while U.S. officials said any released funds would remain subject to American approval.

OPEC is also facing internal pressure. Iraq has reportedly pushed for a higher production quota and raised the possibility of leaving the group if its demands are not met, though its oil ministry later said leaving OPEC was not an official government position.

The market is pricing barrels, not headlines

The latest move shows how quickly oil traders have shifted from fear of disruption to concern about available supply. A ship attack near Hormuz would normally support prices, but the market is now focused on returning flows, Gulf producers increasing shipments, and the possibility of more OPEC supply.

That does not mean the risk has disappeared. The Strait of Hormuz remains a fragile passageway, and further attacks could quickly reverse sentiment. But with Brent down more than 8% for the week before Friday’s move, traders appear to believe that the supply picture has improved enough to outweigh fresh tension.

We also reported Trump says Strait of Hormuz will remain open and toll-free.

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