Oil Prices Plummet Despite Iran Tensions

Oil prices have fallen on Friday and are poised to end the week lower despite rising tensions between the US and Iran. Brent crude futures were down 60 cents, or 0.67%, to $89.10 a barrel, while West Texas Intermediate (WTI) crude futures fell 64 cents, or 0.77%, to $82.89.

Despite diplomatic efforts hitting a roadblock, there are signs of additional oil flowing through the Strait of Hormuz, according to ING analysts. They noted that producers have adapted to the new realities and are becoming increasingly comfortable navigating the strait.

The Strait of Hormuz is a critical waterway for global oil trade, with recent total Gulf exports estimated at 15 million to 16 million barrels per day (bpd), 7 million to 8 million bpd below pre-war levels but 5 million to 6 million above the lowest point in March.

The Trump administration has repeatedly told mediators it has no interest in reviving the June memorandum of understanding, complicating diplomatic efforts to restart talks with Iran.