Oil Drops as Tankers Exit Strait of Hormuz, Yet Geopolitical Risks Loom

Oil prices slipped on Friday and were on track for steep weekly losses, as a growing number of stranded tankers successfully navigated the Strait of Hormuz, easing immediate supply fears despite a fresh maritime attack near Oman. Brent crude futures edged down 19 cents to $75.07 a barrel, while U.S. West Texas Intermediate fell 13 cents to $71.79, according to data from CNBC.

The decline comes after both benchmarks surged over 2% on Thursday following reports that a cargo vessel was struck by an unknown projectile near Oman. The incident prompted the United Nations shipping agency to suspend its voluntary evacuation scheme and reignited geopolitical tensions in the region. Two U.S. officials told Reuters that Iran was responsible for the attack, although Iranian authorities have only stated that vessels passing outside designated Hormuz routes cannot guarantee their security.

Supply Fears Ease but Risks Remain

Data released Thursday showed that crude shipments through the Strait of Hormuz rose to their highest level since the U.S.-Israeli conflict with Iran began in February, after a ceasefire deal reopened the waterway. More tankers exited the strait this week, contributing to the easing of supply concerns. However, overall traffic remains a fraction of the pre-conflict daily average of 125 ships, underscoring the fragile nature of the recovery.

IG analyst Tony Sycamore noted that the geopolitical risk premium is creeping back into prices. "Markets will be watching intently to see if tanker traffic resumes or if these latest hurdles force producers to tap the brakes on planned production increases," he said. Both Brent and WTI are set for losses of close to 7% this week, reflecting the market's mixed signals.

Venezuela Earthquake Adds Uncertainty

Compounding the supply picture, earthquakes struck Venezuela on Thursday, raising concerns about potential disruptions to the country's oil output. Preliminary assessments indicated limited damage to major oil, gas, and refining infrastructure, as most production regions are far from the hardest-hit areas. However, power outages have cast doubt on whether Venezuela can sustain its pre-earthquake output of close to 1.2 million barrels per day, sources told CNBC.

The combination of easing strait traffic and a potential Venezuelan supply hit creates a complex backdrop for oil markets. While the immediate crisis in the Strait of Hormuz appears to be abating, the underlying geopolitical tensions and the threat of further disruptions remain elevated.

Market Outlook

Analysts suggest that the current price weakness may be temporary if geopolitical risks re-escalate or if Venezuelan output falters. The market is also watching for any signals from OPEC+ regarding production adjustments. With the Strait of Hormuz still operating well below capacity and Iran's ambiguous stance, the risk premium is unlikely to disappear entirely.

1. Oil prices fell on Friday as more tankers exited the Strait of Hormuz, easing supply fears.
2. Both Brent and WTI are heading for weekly losses of about 7%.
3. A cargo vessel attack near Oman and Venezuelan earthquakes add geopolitical and supply uncertainty.
4. Strait traffic remains a fraction of pre-conflict levels, keeping the market on edge.

Sources: CNBC - Oil falls amid resumption of strait shipments, CNBC - Goldman says private credit may invest dry powder