TLDR
- Brent crude tumbled over 4% to approximately $72 per barrel Friday; WTI declined 3% to roughly $69
- Vessel traffic through the Strait of Hormuz climbed to the highest level since conflict with Iran erupted in late February
- An Iranian attack drone struck a Singapore-registered container vessel Thursday
- Washington retaliated Friday with strikes on Iranian missile facilities, drone storage locations, and radar installations along the coast
- Crude futures partially rebounded in late Friday trading following confirmation of the U.S. military response
Crude oil markets experienced dramatic volatility Friday, initially plunging before staging a recovery after Washington launched retaliatory strikes against Iranian military targets in response to a drone assault on a commercial ship in the Strait of Hormuz.
Brent crude futures tumbled more than 4% during regular trading to settle near $72 per barrel. West Texas Intermediate declined approximately 3% to around $69 — marking the first settlement below $70 since hostilities with Iran commenced in late February. Both key oil benchmarks have now shed roughly 25–27% of their value over the past month.
The morning selloff occurred as maritime traffic passing through the Strait of Hormuz climbed to its most robust level since the beginning of the conflict. This development alleviated concerns regarding potential oil supply interruptions and contributed to downward pressure on prices.
What Drove the Initial Price Decline
Washington and Tehran signed a 60-day memorandum of understanding the previous week, temporarily halting hostilities. The agreement includes provisions for restoring commercial shipping operations through the Strait of Hormuz, alongside nuclear negotiations in return for potential sanctions relief.
As maritime vessels resumed more normal passage through the critical waterway, market participants began removing some of the geopolitical risk premium that had accumulated in crude oil valuations.
Dennis Kissler, senior vice president at BOK Financial, cautioned Thursday that the market correction might be excessive. “While the Strait of Hormuz is moving oil, there still exists the possibility of mines in the area as well as rogue Iranian militia continuing to make threats on shipping lanes,” he noted. “The latest sell-off in prices is likely overstating the true near-term fundamentals,” he continued.
The Drone Attack That Shifted Market Sentiment
On Thursday, Iran launched what U.S. officials characterized as a one-way attack drone against the Singapore-registered container vessel Ever Lovely. The ship suffered damage while navigating through the strait.
President Trump expressed dissatisfaction with the incident Friday. “I don’t like the fact that they took a shot,” he remarked to the press. “They shouldn’t be doing that.”
U.S. Central Command confirmed that American warplanes targeted Iranian missile and drone storage facilities along with coastal radar systems Friday. The military described the operation as a “powerful response to yesterday’s attack.”
Iran’s Islamic Revolutionary Guard Corps asserted that its forces “successfully repelled the attack.”
The military exchange generated renewed uncertainty about the durability of the ceasefire arrangement. Trump had previously indicated he would resume military operations if Tehran breached the agreement’s conditions.
Despite the military strikes, commercial shipping continued moving through the strait Friday. Central Command confirmed it would maintain coordination efforts to ensure safe passage for merchant vessels.
One outstanding question involves whether Iran will impose transit fees on ships passing through Hormuz. Oman informed European officials that certain tolls might eventually be implemented — a matter that remains contentious between Washington and Tehran.
Crude oil futures climbed back above their session lows late Friday following confirmation of the U.S. military strikes.
