US crude oil dipped below $70 a barrel Friday as traders remained optimistic about tanker traffic flow through the Strait of Hormuz – even after an Iranian attack on a cargo ship paused a large-scale evacuation.
West Texas Intermediate crude oil fell 3.4% to $69.46 a barrel, while Brent crude oil – the global benchmark – declined 3.1% to $72.18 a barrel.
National average gasoline prices hit $3.90 a gallon Friday, according to AAA – down 13% over the past month and sharply lower than highs of $4.56 a gallon earlier this year.
Iran on Thursday reportedly attacked a Singaporean cargo ship passing through the strait, just hours after the regime warned that “violators” who did not use its own sanctioned route through the waterway would be “dealt with.”
Following the attack, the United Nations’ International Maritime Organization announced it would be pausing its evacuation of ships through the strait – though it noted the attacked cargo vessel “did not transit under IMO’s evacuation framework.”
“Following the launch of the IMO’s evacuation plan, through which several vessels have already been successfully evacuated, I have decided to temporarily pause its implementation in order to reconfirm that the necessary safety guarantees continue to be in place,” IMO Secretary-General Arsenio Dominguez said in a statement.
The US and Iran last week signed a memorandum of understanding that officially reopened the strait and gave the two nations 60 days to reach a final agreement.
On Tuesday, the US and Oman agreed upon a new UN-backed route along the Omani coast for ships that had been stuck in the strait for more than 100 days – but Iran claimed the route was announced without their input.
About 26 ships passed through the Omani route on Wednesday, while about 15 sailed through the Iranian one, according to the Financial Times – a far cry from pre-war levels of 135 ships a day.
Traders remain cautiously optimistic, celebrating the resumption of any tanker traffic after the key strait – which typically transports 20% of the world’s oil supplies – was blockaded for months, causing the worst-ever energy supply disruption.
US crude oil prices plunged nearly 8% this week – a roughly $5 drop – as vessels started to exit the Persian Gulf, but analysts have warned it could take many months for gasoline prices to drop below the $3 mark.
Meanwhile, tensions between the US and Iran remain high as they try to reach an official peace agreement, including the unfreezing of Iranian assets.
President Trump and Vice President JD Vance have argued that billions of dollars in unfrozen Iranian assets will turn into a payday for American farmers, since the Islamic Republic’s funds will be used exclusively to buy agricultural and medical supplies from the US.
The speaker of Iran’s parliament on Thursday rejected those claims.