Oil Prices Plummet as Crude Flows Improve Amid US-Iran Tensions

Oil prices declined by more than $1 on Friday as improved crude flows through key maritime routes eased concerns over supply disruptions. Despite ongoing tensions in the US-Iran conflict, Brent crude futures dropped $1.03, or 1.2%, to $88 a barrel, while US West Texas Intermediate (WTI) crude fell $1.50, or 1.8%, to $82.09 a barrel.

The decline marks a significant drop from earlier highs, but both benchmarks are still on track for monthly gains of around 20%. This reflects the geopolitical risk premium built into oil markets since the conflict escalated.

The strategic waterway, which handles one-fifth of global crude oil and liquefied natural gas shipments, has remained largely blockaded since the US-Israel war on Iran began on February 28. However, tanker traffic has continued through both the Strait of Hormuz and the Red Sea, albeit with heightened security risks pushing up freight costs and insurance premiums.