WTI crude oil prices plunged nearly 11.5% on Friday, closing at a five-week low, while RBOB gasoline fell 5% to a one-week low. The sharp decline follows Iran’s announcement that the Strait of Hormuz is now “completely open” for commercial shipping, signaling potential peace negotiations that could release millions of barrels of oil and fuel previously trapped in the Persian Gulf. This development, coupled with a ceasefire agreement between Israel and Lebanon, has raised expectations for a formal resolution to the ongoing conflict.

The implications for the energy sector are significant, as the International Energy Agency noted that approximately 13 million barrels per day of global oil supply have been affected by the Iran war and the closure of the Strait. OPEC+ plans to boost production by 206,000 bpd in May may now be jeopardized, as Middle Eastern producers face production cuts due to the conflict.

Market professionals should closely monitor developments in the region, as the potential for increased supply from Iran could reshape pricing dynamics, while ongoing geopolitical tensions in Ukraine continue to place upward pressure on oil prices.

Source: nasdaq.com