Oil Retreats as Shipping Resumes

Oil prices declined sharply after a brief easing in supply concerns, as at least one vessel successfully transited the Strait of Hormuz under US military escort.

Brent Crude fell more than 3%, while West Texas Intermediate dropped about 4%, reflecting a pullback in the geopolitical risk premium that had driven prices higher in recent sessions.

Ceasefire Holds Despite Ongoing Tensions

Although clashes between the United States and Iran continue, Washington stated that the ceasefire remains in place.

Donald Trump reaffirmed that the US would continue efforts to maintain safe passage through the waterway, even as missile and drone threats persist in the region.

The United Arab Emirates also reported attacks, highlighting the fragile nature of the current truce.

Strait of Hormuz Shows Signs of Limited Recovery

The successful escort of a commercial vessel through the Strait of Hormuz marks a small but significant step toward restoring global oil flows.

Before the conflict, roughly 20% of the world’s oil supply moved through the strait daily, making it one of the most critical chokepoints in global energy markets.

However, analysts caution that current shipping activity remains limited and far from a full reopening.

Risk Premium Begins to Ease

Market participants are beginning to reassess worst-case supply disruption scenarios.

The ability to move even a small number of ships through the strait has reduced immediate fears of a complete supply shutdown, leading to a decline in oil prices.

Still, the situation remains highly volatile, with any escalation likely to reverse recent price declines.

Inventory Data in Focus

Investors are now turning attention to US inventory reports for further market direction.

Analysts expect a drawdown of approximately 2.8 million barrels of crude, which would mark a second consecutive weekly decline and signal tightening supply conditions.

Outlook

Oil markets remain sensitive to developments in the Middle East.

While limited progress in restoring shipping has eased some pressure, the fragile ceasefire and ongoing military activity suggest continued volatility ahead.

Any sustained reopening of the Strait of Hormuz could stabilize prices, but renewed conflict would likely push them higher again.