What happened: The price of Brent (BZ=F) oil futures fell more than 4% to hover near $72 per barrel on Friday, while West Texas Intermediate crude futures (CL=F) dropped 3% to around $69.
What’s behind the move: Shipping through the strategically important Strait of Hormuz has reached its highest level since the Iran war broke out in late February.
A resumption of traffic through the trade passageway has helped ease concerns over potential oil supply disruptions despite an attack on a vessel in the Gulf of Oman.
“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,” BOK Financial senior vice president Dennis Kissler noted on Thursday.
“Therefore, the latest sell-off in prices is likely overstating the true near-term fundamentals,” he added.
What else you need to know: Oil recently dropped, hovering near pre-Iran war levels after the US and Iran signed a memorandum of understanding to pause the conflict and negotiate toward a broader agreement.
The agreement includes steps to reopen the Strait of Hormuz and restore commercial shipping, although implementation remains fragile.
Brent has fallen roughly 27% over the past month, while WTI has declined 25% over the same period, as both sides moved closer toward a negotiated agreement.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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