Oil prices experienced a decline on Friday following President Donald Trump's announcement that Iran permitted 10 oil tankers to transit through the Strait of Hormuz this week as a "gift" to the United States, indicating a tentative reduction in tensions at this critical maritime chokepoint.
The international benchmark for crude oil, Brent, saw a 0.6% decrease, settling at $107.36 per barrel, while U.S. West Texas Intermediate crude fell by 0.8%, trading at $93.72 per barrel.
During a Cabinet meeting held on Thursday, Trump characterized this event as a gesture of goodwill from Tehran amidst current diplomatic negotiations.
“They said, ‘To show you the fact that we’re real and solid and we’re there, we’re going to let you have eight boats of oil ... and they’ll sail up tomorrow,’” he stated, referencing discussions with Iranian officials. Trump later noted that the total number of shipments had increased: “They then apologized for something they said, and they said, ‘We’re going to send two more boats.’ And it ended up being 10 boats.”
Market participants have been closely tracking developments in the Strait of Hormuz for indications of disruption or de-escalation, as ongoing tensions between Washington and Tehran continue to create volatility in energy prices. This strait is an essential passageway for global crude oil transportation.
Trump’s statements indicate that at least some oil shipments are still transiting through this waterway, which may alleviate immediate supply worries. Nonetheless, analysts have warned that the broader oil market still remains fragile, despite the resumption of isolated shipments.
“The oil market did not underreact to the disruption in the Strait of Hormuz; it absorbed it,” commented Paola Rodriguez-Masiu, chief oil analyst at Rystad Energy. “For nearly four weeks, markets have shown remarkable resilience … supported by a combination of pre-war surplus, crude-on-water, and policy barrels that provided a temporary buffer and kept prices contained. That phase is now ending.”
Rystad further notes that the global oil system has transitioned from being "buffered" to "fragile" after several weeks of supply losses and inventory drawdowns, leaving minimal capacity to withstand additional shocks. It has been reported that approximately 17.8 million barrels per day of oil and fuel flows through the Strait of Hormuz have been impacted, leading to a cumulative loss of nearly 500 million barrels of total liquids thus far.
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