TLDR
- Brent crude plunged more than 4% to approximately $72 per barrel Friday; WTI declined 3% to roughly $69
- Maritime traffic through the Strait of Hormuz hit peak levels since conflict escalation in late February
- Iranian forces deployed an attack drone against a Singapore-flagged container vessel Thursday
- US military conducted retaliatory strikes Friday targeting Iranian missile facilities, drone depots, and radar installations
- Crude prices regained ground in late Friday trading following confirmation of American military action
Crude oil markets experienced significant volatility Friday, initially plunging before staging a recovery following United States military operations against Iranian targets in response to an attack on commercial shipping in the Strait of Hormuz.
Brent crude experienced a decline exceeding 4% during regular trading hours, settling near the $72 per barrel mark. West Texas Intermediate decreased approximately 3% to the $69 level — marking its initial settlement beneath $70 since hostilities with Iran intensified in late February. The two primary benchmarks have now surrendered between 25–27% of their value throughout the past month.
The morning selloff occurred as vessel movement through the Strait of Hormuz achieved its most robust levels since hostilities commenced. This development alleviated concerns regarding potential supply chain interruptions and applied downward pressure on pricing.
Factors Behind the Price Decline
Washington and Tehran established a 60-day memorandum of understanding during the previous week, implementing a temporary halt to military operations. The framework encompasses provisions for resuming commercial navigation through the Strait of Hormuz, coupled with nuclear discussions contingent upon sanctions modification.
As maritime vessels resumed more regular passage through the waterway, market participants reduced the conflict-related premium previously incorporated into crude valuations.
Dennis Kissler, senior vice president at BOK Financial, cautioned Thursday that the market correction might be excessive. “While the Strait of Hormuz is moving oil, there still exists the possibility of mines in the area as well as rogue Iranian militia continuing to make threats on shipping lanes,” he said. “The latest sell-off in prices is likely overstating the true near-term fundamentals,” he added.
The Drone Attack That Altered Market Dynamics
Thursday saw Iran target the Singapore-flagged container vessel Ever Lovely using what American officials characterized as a one-way assault drone. The vessel suffered damage during its transit through the strategic waterway.
President Trump expressed dissatisfaction Friday regarding the incident. “I don’t like the fact that they took a shot,” he told reporters. “They shouldn’t be doing that.”
US Central Command reported that American military aircraft engaged Iranian missile storage facilities, drone arsenals, and coastal surveillance radar systems Friday. Officials characterized the operation as a “powerful response to yesterday’s attack.”
Iran’s Islamic Revolutionary Guard Corps claimed its forces “successfully repelled the attack.”
The military confrontation generated renewed uncertainty about the durability of the ceasefire arrangement. Trump had indicated previously that military operations would resume should Iran breach the agreement’s provisions.
Notwithstanding the strikes, maritime traffic maintained movement through the strait Friday. Central Command affirmed its continued provision of safe passage coordination services for commercial shipping.
An outstanding matter involves whether Tehran will implement transit fees for vessels navigating Hormuz. Oman indicated to European representatives that certain toll structures may eventually be necessary — representing a continuing point of contention between Washington and Tehran.
Crude oil valuations climbed from session lows during late Friday trading after confirmation of the American military strikes.
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