Global oil prices extended their decline on Friday as the resumption of shipping through the Strait of Hormuz eased concerns over supply disruptions and pushed Brent crude below the $80 per barrel mark for the first time in more than three months.
Brent crude oil, the international benchmark for Nigerian crude oil, fell to around $79.42 per barrel, while U.S. West Texas Intermediate (WTI) crude traded near $76.43 as oil tankers resumed movement through the strategic waterway following a peace agreement between the United States and Iran.
The latest decline places Brent on track for a sharp weekly loss as traders unwind the geopolitical risk premium that had supported prices during months of conflict in the Middle East.
Market sentiment improved after reports indicated that more than 85 million barrels of crude oil stranded in the Gulf region could gradually return to international markets.
Several Saudi-flagged tankers carrying millions of barrels of crude were among the first vessels to navigate the reopened route, signaling the gradual normalization of energy exports from the region.
Kuwait and Iraq have also begun preparations to restore production and export activities that were disrupted during the conflict.
The Strait of Hormuz remains one of the world’s most important energy chokepoints, handling a significant portion of global crude oil and liquefied natural gas shipments. Any disruption to traffic through the corridor typically triggers sharp price movements across energy markets.
Despite the renewed flow of oil, analysts remain cautious about declaring a full return to normal operations. Industry participants have warned that confidence among shipowners and insurers may take time to recover, while geopolitical risks in the region continue to pose challenges to long-term stability.
Investors are also monitoring diplomatic developments after reports that a planned meeting between U.S. and Iranian officials was canceled, raising questions about the durability of the broader peace framework. Continued tensions elsewhere in the region have further tempered optimism.
For oil-importing economies, the decline in crude prices could provide relief from energy-related inflationary pressures.
However, for major oil-producing nations, sustained weakness in prices may weigh on export revenues and fiscal projections if supply continues to increase in the coming weeks.
With Gulf exports gradually returning and traders reassessing global supply expectations, the oil market appears to be transitioning from a geopolitical crisis-driven rally to a supply normalization phase.
Market participants will be watching tanker movements and production data closely for signs that the recovery in exports is gaining momentum.