Global oil prices were on track for their steepest weekly decline in months on Friday as the gradual resumption of shipping through the Strait of Hormuz eased concerns over supply disruptions that had unsettled energy markets during the recent US-Iran conflict. Brent crude traded near $79 per barrel and was down more than 9 per cent for the week, while West Texas Intermediate (WTI) hovered around $75 per barrel.

The decline follows an interim peace agreement between Washington and Tehran that has enabled the gradual reopening of the strategically important waterway. The Strait of Hormuz is one of the world's most critical energy corridors, handling roughly one-fifth of global oil supplies. The route had been effectively closed after both Iran and the United States imposed blockades during the conflict, triggering a surge in crude prices and raising fears of prolonged disruptions to global energy supplies.

Market sentiment has improved significantly in recent days as signs of normalization emerged across the region. Tankers carrying crude oil that had been stranded in the Persian Gulf resumed transit through the strait on Thursday. Kuwait also announced plans to gradually increase oil production as export operations return to normal. The developments have reassured traders that a major supply crisis may be avoided, prompting a broad sell-off in crude futures.

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The United States Central Command said restrictions on traffic to and from Iranian ports and coastal areas had been lifted, further supporting the recovery in shipping activity. Maritime authorities have simultaneously advised vessels to follow designated routes along the Omani coastline as a precautionary measure while efforts continue to address navigational hazards, including the potential presence of sea mines in certain areas of the waterway.

The return of oil shipments has led investors to unwind much of the geopolitical risk premium that had accumulated in energy markets since hostilities intensified earlier this year. As a result, crude oil prices have now surrendered nearly all the gains recorded since the conflict began in February. US President Donald Trump welcomed the decline in prices, arguing that markets were reacting positively to the interim agreement and the easing of tensions between the two countries.

Despite the progress, industry experts caution that a full recovery in oil exports may take time. Restarting production requires more than reopening shipping routes, as oil wells must be brought back online, infrastructure needs inspection and repairs, and authorities must continue de-mining operations in affected areas. In addition, some shipowners and insurers remain cautious about operating in the region, suggesting that supply chains could take several weeks to return to normal even as maritime traffic steadily improves.

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