West Texas Intermediate (WTI) crude oil prices held steady above $92.00 during the Asian session on Friday, reflecting a mild positive bias but lacking strong bullish momentum due to hopes for a stabilizing Iran ceasefire. WTI was up around 0.25% for the day, though prices remained on track for heavy weekly losses [1]. Meanwhile, U.S. crude surged above $100 during Thursday's session as energy markets reacted to continued restrictions on shipping traffic through the Strait of Hormuz, despite a two-week ceasefire between the U.S. and Iran. This session marked the biggest one-day drop in U.S. crude oil prices since 2020, attributed to the ceasefire agreement [2].
Israeli Prime Minister Benjamin Netanyahu announced instructions to begin direct negotiations with Lebanon, addressing a key issue in the U.S.-Iran ceasefire and capping crude oil prices. However, Netanyahu also stated that Israeli attacks on Hezbollah in Lebanon would continue [1]. Oil prices pulled back from session highs after Israel agreed to negotiate with Lebanon, but the status of the Strait of Hormuz remains a central concern in ongoing negotiations [2].
Iran halted shipping traffic through the Strait of Hormuz in response to Israeli attacks on Lebanon, and the CEO of Abu Dhabi National Oil Co. (ADNOC), Sultan Ahmed Al Jaber, confirmed that the strait remains closed, with access being restricted, conditioned, and controlled [1][2]. Reports also indicate that Iran may require shipping companies to pay tolls in cryptocurrency to pass through the strait, prompting U.S. President Donald Trump to warn Iran against charging oil tankers for passage. Trump's top economic advisor, Kevin Hassett, noted that even a single oil tanker passing through would significantly alleviate the global supply crunch [2].
In addition, a critical Saudi Arabian pipeline to the Red Sea was reportedly attacked by Iran, cutting its throughput and prompting governments to consider contingency measures. Japan is reportedly considering releasing about 20 days' worth of oil reserves as early as May [2]. Market attention is also focused on upcoming U.S. consumer inflation figures, which could influence Federal Reserve policy expectations and impact the U.S. dollar and oil prices [1].
Despite the ceasefire, geopolitical risks and supply disruptions continue to support oil prices, while equity markets have responded positively to the prospect of peace, with the Dow jumping 1,300 points for its best day since April 2025 [2].
CONCLUSION
The closure of the Strait of Hormuz and ongoing geopolitical tensions have driven volatility in oil prices, with WTI holding above $92 and U.S. crude briefly surging above $100. While hopes for a ceasefire have buoyed equity markets, energy markets remain cautious amid unresolved issues and potential supply disruptions. The situation remains fluid, with further developments in negotiations and supply measures likely to impact markets.