Global crude oil prices declined sharply on Friday, with major benchmarks falling below the $90-per-barrel level as concerns over potential supply disruptions in the Strait of Hormuz eased and traders reduced geopolitical risk positions.
Brent crude futures, the international benchmark, fell 2.97% to $87.70 per barrel, while U.S. benchmark West Texas Intermediate (WTI) declined 3.10% to $84.99 per barrel. Murban crude, a key benchmark for Middle Eastern exports to Asia, dropped 3.74% to $83.99 per barrel.
The decline marks a reversal from the recent rally that was fueled by fears of escalating tensions involving Iran, the United States, and the strategically important Strait of Hormuz, a shipping route that carries nearly 20% of global oil supplies.
Market participants noted that despite heightened geopolitical tensions, there have been no confirmed disruptions to oil shipments through the waterway. Tanker traffic continues to move normally, while major Gulf producers, including Saudi Arabia, the United Arab Emirates, Kuwait, Iraq, and Qatar, have maintained regular export operations.
Analysts said the absence of supply interruptions has led traders to unwind part of the geopolitical premium that had been built into crude prices earlier this week.
Oil prices also faced pressure from renewed concerns about global demand. Investors are increasingly focusing on slower manufacturing activity in Europe, uneven economic recovery in China, and the impact of elevated interest rates on fuel consumption and industrial activity.
Meanwhile, profit-taking activity added to the downward momentum after crude prices failed to sustain gains above the $90-per-barrel threshold. Several hedge funds and commodity traders moved to lock in profits following the recent surge in prices.
Energy markets are now closely watching developments in the Middle East and shipping activity through the Strait of Hormuz. Analysts believe that continued stability in the region could lead to further price declines, while any disruption to maritime traffic could quickly reignite supply concerns and push crude prices higher.
For now, market sentiment suggests that traders are shifting their attention back to supply-demand fundamentals as concerns over an immediate oil supply shock continue to ease.
