Oil prices rebounded modestly, paring a substantial weekly loss, as traders evaluated the resumption of crude flows through the Strait of Hormuz alongside persistent tensions in the region. Brent crude climbed above $80 a barrel, reducing its weekly drop to approximately 8%, while West Texas Intermediate (WTI) for August delivery hovered around $77.
Ships carrying previously stranded oil have begun exiting the Strait of Hormuz following an interim peace accord reached this week between Washington and Tehran. However, US Vice President JD Vance paused a trip to Switzerland for further discussions with Iran, contributing to market uncertainty. Despite the partial reopening of the Strait, Israeli forces continued strikes against Tehran-backed Hezbollah in Lebanon, even though a cessation of hostilities in Lebanon was a key point in the US-Iran peace agreement.
On Thursday, vessels transporting nearly 10 million barrels of oil were either outside or actively sailing through the Strait, including the first Saudi-owned tankers since the conflict began more than three months ago. In peacetime, the Strait of Hormuz typically accounted for roughly 20 million barrels of daily oil and product transits. Vance stated on Thursday that 12.5 million barrels of oil had passed through the Strait the previous night, potentially marking the highest daily volume since the war commenced in late February. The Abu Dhabi National Oil Company (Adnoc) instructed customers to resume crude oil loadings from Persian Gulf ports, signaling producers are adapting to the changing situation.
