Oil prices fell again on Friday, leaving West Texas Intermediate on course for a steep weekly loss, as traders priced in the return of crude flows through the Strait of Hormuz after the US-Iran interim agreement took effect.
The US benchmark traded around the mid-$75 to $76 range in Asian hours, close to its weakest level since before the conflict escalated.
The move reflected a rapid unwinding of the geopolitical premium that had lifted prices earlier this year.
Still, the market is not treating the deal as risk-free, with shipping confidence, Iranian compliance and future governance of the waterway all still uncertain.
Hormuz reopening resets the oil trade
The immediate pressure on crude came from signs that tankers were again moving through the Strait of Hormuz, the strategic corridor that handles a major share of global oil and LNG flows.
Brent and WTI declined on Friday after vessels began transiting the reopened route following the peace agreement between Washington and Tehran.
The interim accord gives negotiators 60 days to work towards a final settlement and allows commercial passage through the Strait during that window.
Vice President JD Vance said the 60-day period had begun on Thursday, with Washington pushing for the waterway to remain toll-free.
The change has shifted oil’s near-term narrative.
Instead of trading on fears of a supply squeeze, the market is now focused on how quickly trapped crude can reach buyers and whether producers in the region can restore output without disruption.
Stranded barrels could deepen the selloff
The supply numbers are large enough to keep sellers active.
Kpler analyst Muyu Xu said in a note that reopening the Strait could release about 93 million barrels of stranded non-Iranian crude from the Persian Gulf.
Kpler also estimated that easing US restrictions on Iranian crude could free roughly 72 million barrels stranded on tankers west of Chabahar.
That potential wave of barrels is hitting a market where Asian refiners have already booked much of their June-to-August supply.
Moreover, the maintenance shutdowns at Chinese refineries could limit near-term demand for additional cargoes.
Analysts said that the market still needs consistent evidence that tanker traffic has normalised before confidence fully returns.
That caution is important. Shipowners had warned earlier that full resumption of Hormuz traffic could take weeks unless the peace deal looked durable.
Technical pressure builds below $76
WTI’s weekly slide of roughly 9.5% has damaged the short-term chart.
Source: TradingView
A break below the $76 area suggests traders are no longer defending the war-premium zone, putting the $75 level in focus as the next psychological support.
If prices fail to stabilise there, the market could test lower ranges last seen before the Middle East conflict drove a risk premium into crude.
On the upside, WTI would need to reclaim the $78-$80 area to suggest the selling pressure is easing.
For now, the path of least resistance remains lower.
The reopening of Hormuz has turned the oil market from scarcity risk to supply digestion, and traders are likely to keep selling rallies unless there is fresh disruption or evidence that the agreement is starting to fray.
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