Oil prices extended their decline on Friday, closing out the week with a roughly 5 percent loss as traders weighed the possibility that the Strait of Hormuz could reopen under a joint governance arrangement between Iran and Oman, according to Ship & Bunker.
Brent crude fell 38 cents to settle at $89.32 per barrel as of 1654 GMT, while West Texas Intermediate dropped 36 cents to $83.17, Ship & Bunker reported.
Market Reacts to Reported Transit Increase
Janiv Shah, an analyst at Rystad Energy, told Ship & Bunker that the market had been caught off guard by reports of increased shipping flow through the Strait, the proposed Iran-Oman shipping corridor, and claims from the United States regarding mine clearance operations in the waterway.
“The market has been surprised by the additional flow, Iran-Oman shipping corridor and the U.S. mine clearance claims,” Shah said, as quoted by Ship & Bunker. He added that the weekly price decline likely reflects the volume able to exit the Strait and the pace at which flows are ramping up, which would allow Asian refiners to increase consumption.
Conditions Attached to Iranian Cooperation
According to Ship & Bunker, the optimism among traders appeared to overlook comments from Tehran indicating that full normalization of transit through Hormuz remains conditional. Iran reportedly demanded sanctions relief, an end to a U.S. blockade, and a halt to Israeli military operations in Gaza, Lebanon, and Syria before agreeing to broader cooperation. These conditions were said to have followed pressure from a Qatari emissary urging Iran to respect freedom of navigation.
Separately, Ship & Bunker reported that Iran’s supreme leader called for political unity on Friday, cautioning government officials against rhetoric that could deepen internal divisions or damage public confidence, while urging them to project the republic’s “power and strength.”
Tanker Earnings Hit Record Highs
In related market developments, Baltic Exchange data cited by Ship & Bunker showed that earnings on the benchmark Saudi Arabia-to-China supertanker route surged to a record $647,000 per day, ten times higher than the same period last year. This came as Gulf producers increased crude shipments through Hormuz.
Julianne Geiger, market analyst at Oilprice.com, noted that while increased crude flow should theoretically ease the oil supply crunch, it has instead created a new bottleneck involving vessel availability, according to Ship & Bunker. Geiger explained that few tanker owners are willing to transit the Strait, forcing exporters to compete for the limited number who will accept the risk, resulting in what she described as an extraordinary premium for those willing to make the voyage.
Does This Matter to You?
Developments around the Strait of Hormuz carry direct implications for freight markets and crude flows that underpin bunker demand patterns across major shipping lanes. The surge in supertanker earnings on the Saudi Arabia-to-China route, as reported by Ship & Bunker, reflects tightening vessel availability tied to risk perceptions around the Strait, a factor that could influence charter rates and route planning for tanker operators. Fluctuations in Brent and WTI prices driven by Hormuz-related news may also affect bunker fuel cost planning for vessel operators and traders monitoring the region.
Gulf Bunkering does not provide operational or security guidance. This article is for informational purposes only. Operators should consult flag state authorities, P&I clubs, and relevant advisories for decisions relating to transit planning.
Sources: Ship & Bunker
