Hormuz Hopes Offset Iran Tensions as Oil Prices Fall

Oil prices declined on Friday, marking sharp weekly drops as traders weighed hopes of reopening the Strait of Hormuz against ongoing Iran tensions.

Brent crude futures settled at $89.31 a barrel, while West Texas Intermediate (WTI) crude futures fell to $83.40, with both benchmarks posting significant declines for the week.

The price drop was attributed in part to comments from Federal Reserve chairman Kevin Warsh, which pointed to a possible interest rate hike later this year to combat inflation, according to Phil Flynn of Price Futures Group.

Geopolitical risks remained elevated as the US-Israeli war with Iran entered its sixth month, but traders were cautiously optimistic about a potential deal to reopen the critical waterway, which carries around 20% of global oil supplies.