TLDR
- Brent crude tumbled more than 4% to approximately $72 per barrel on Friday; WTI declined 3% to roughly $69
- Transit volumes through the Strait of Hormuz climbed to their highest point since hostilities with Iran commenced in late February
- A Singapore-registered container vessel was hit by an Iranian attack drone on Thursday
- Washington retaliated Friday with strikes targeting Iranian missile facilities, drone depots, and radar installations along the coast
- Crude benchmarks clawed back losses late Friday following confirmation of the U.S. military action
Crude oil markets experienced significant volatility on Friday, initially plunging before staging a recovery after Washington executed military strikes against Iranian targets in response to a drone assault on a merchant vessel navigating the Strait of Hormuz.
Brent crude plummeted over 4% during regular trading hours, settling near the $72 per barrel mark. West Texas Intermediate declined approximately 3% to trade around $69 — marking the first settlement beneath $70 since the conflict with Iran erupted in late February. The two primary oil benchmarks have now retreated roughly 25–27% from their peaks over the preceding month.
The morning selloff occurred as vessel traffic passing through the Strait of Hormuz hit its most elevated level since fighting began. This development alleviated concerns regarding potential oil supply interruptions and applied downward pressure on commodity prices.
What Triggered the Crude Price Decline
Washington and Tehran entered into a 60-day memorandum of understanding the previous week, temporarily halting active hostilities. The agreement encompasses provisions for restoring commercial navigation through the Strait of Hormuz, coupled with nuclear negotiations in return for sanctions relief.
As vessels resumed more regular passage through the strategic waterway, market participants began removing some of the conflict-related risk premium that had accumulated in crude valuations.
Dennis Kissler, senior vice president at BOK Financial, cautioned on 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 Shifted Market Sentiment
On Thursday, Iran launched what U.S. officials characterized as a one-way attack drone against the Ever Lovely, a container ship flying the Singapore flag. The vessel suffered damage while traveling through the strait.
President Trump expressed dissatisfaction with the incident on Friday. “I don’t like the fact that they took a shot,” he told reporters. “They shouldn’t be doing that.”
U.S. Central Command announced that American military aircraft targeted Iranian missile and drone storage facilities along with coastal radar systems on Friday. Officials described 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 exchange generated renewed uncertainty about the durability of the ceasefire arrangement. Trump had previously indicated he would authorize resumed military operations if Iran breached the agreement’s provisions.
Despite the confrontation, commercial shipping continued transiting the strait on Friday. Central Command confirmed it would maintain coordination efforts to ensure safe passage for merchant vessels.
One outstanding question involves whether Iran will implement transit fees for vessels passing through Hormuz. Oman informed European officials that certain toll charges might eventually be imposed — a matter that remains contested between Washington and Tehran.
Crude oil prices climbed back above their session lows late Friday after news of the U.S. strikes was confirmed.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
