Oil prices retreated on Friday as evidence of recovering crude flows through the Strait of Hormuz helped dissipate supply fears that had built over the previous days.
The decline followed a period of heightened volatility triggered by renewed hostilities between the United States and Iran, which had initially pushed benchmarks higher on fears of a prolonged disruption to global energy supplies.
Brent crude and WTI fell in the session as traders adjusted risk premiums downward.
The price action reflects a rapid repricing of the geopolitical risk that had been embedded in energy markets since the escalation began earlier in the week.
With tanker traffic showing signs of normalization, the immediate threat to the world’s most critical oil chokepoint appears to be receding, allowing the war premium to compress.
Commonwealth Bank of Australia highlighted the shift in a Friday note, pointing to stronger oil flows through the strait as a key factor in calming market nerves.