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Oil slides as Strait of Hormuz diplomacy fails and fighting returns
September WTI was last at $84.12, down $6.35, or 7.0% for the week, after earlier optimism around a workable Hormuz arrangement was overturned by renewed strikes.
Oil markets stayed volatile as uncertainty over the Strait of Hormuz kept traders focused on the risk of supply disruption, with September WTI crude down sharply late Thursday. OilPrice said September WTI futures were trading around $84.12, down $6.35, or 7.0%, for the week, with the weekly result still subject to Friday’s session.
The selloff intensified when traders believed diplomacy could restore a workable route through Hormuz, which would have turned a potential disruption into a temporary shock rather than a longer-lasting constraint. OilPrice noted that the week opened with Washington pausing strikes and Oman proposing regional management of Hormuz, giving markets something concrete to price.
That optimism unraveled quickly, according to OilPrice, after Iran rejected Oman’s plan and launched missiles at U.S. forces. The United States and Saudi Arabia struck Iran-backed groups in Iraq, and U.S. Central Command carried out attacks on Revolutionary Guard targets inside Iran early Thursday.
OilPrice said the reversal showed earlier selling was driven by diplomatic hope rather than improved crude flow. Even after the conflict returned to the center of the trade, OilPrice reported WTI had not recovered all of the ground it lost earlier in the week.
Latest closeWTI crude $86.80 ▲3.8%