The question behind Friday’s WTI oil price pause is simple: if the Strait of Hormuz is reopening, why isn’t crude rallying harder?
West Texas Intermediate traded around $75.60 on Friday at the time of writing, up 0.21% on the day, but still heading for a weekly loss of roughly 10%, according to FXStreet. That mix says more than the small green print does. Traders are no longer paying as much for fear, but they’re not ready to declare the risk dead.
The central issue is not whether Hormuz matters. It does. The harder question is whether the threat is still removing barrels from the market. For now, the evidence points to a market repricing from emergency risk toward fragile normalization. That fits our earlier read on the diplomatic setup in US-Iran Deal Bets Hormuz Shipping on 60 Fragile Days.
Why is the WTI oil price pausing instead of rebounding?
The WTI oil price is pausing because the panic trade has lost its cleanest argument: immediate disruption through the Strait of Hormuz.
FXStreet reports that market sentiment improved after a 60-day memorandum of understanding between Washington and Tehran. That agreement has reduced the geopolitical risk premium in energy prices as worries over prolonged export disruptions faded. Shipping traffic is gradually resuming through the waterway, and several previously stranded crude cargoes have started leaving the region.
That does not make the situation calm. It makes it tradable.
A 0.21% daily rise after a roughly 10% weekly slide is not a bullish reversal. It is a pause after a forced repricing. Traders marked crude lower when the feared physical squeeze failed to keep building. Now they are testing whether $75 and change is a floor or just a stop on the way to a lower clearing price.
The market moved first on headlines. It is now being pulled back by flow evidence.
Which numbers show fear is fading faster than risk?
The clearest number is $75.60. WTI holding there after the week’s sharp decline shows buyers are returning carefully, not aggressively.
The second number is 12.5 million barrels. US Vice President JD Vance said that amount of oil passed through the Strait of Hormuz overnight without interference from Iran.
JD Vance stated that 12.5 million barrels of Oil passed through the Strait of Hormuz overnight without any interference from Iran.
That matters because crude traders do not price diplomatic text in isolation. They price barrels, vessels, restrictions, and delays.
The US Central Command also announced it had lifted all maritime restrictions on traffic traveling to and from Iranian ports and coastal waters. That is a concrete operational shift, not just political signaling.
The broader context remains severe. The WTO and AXSMarine Strait of Hormuz Trade Tracker said that by June, after the February 28, 2026 closure, outbound shipments of crude oil, LNG, and fertilizer-related cargoes had effectively ground to a halt. Crude oil flows were down 95%, LNG 99%, and fertilizer-related cargoes 94%. Before the conflict, those flows accounted for roughly 20% to 33% of global seaborne volumes in their respective categories, according to the tracker.
That is why the WTI oil price moved so violently. Hormuz was not an abstract risk. The data showed a real collapse in traceable flows. Now the market is reacting to the first signs that the collapse is reversing.
Why did resumed Hormuz shipments drain the premium so quickly?
Oil risk premiums are unstable when they depend on a disruption that might happen, rather than one that is still visibly happening.
If vessels are moving, restrictions are lifted, and stranded cargoes are leaving, traders have less reason to bid crude as if a shortage is imminent. That is the mechanism behind the week’s pullback.
Deutsche Bank, cited by FXStreet, said renewed oil flows initially pressured crude prices lower after the agreement was signed, although the market later stabilized. The bank also said the gradual resumption of exports through Hormuz is easing concern about global supply disruptions, while longer-term negotiation uncertainty remains.
That distinction matters. Resumed shipments reduce the immediate probability of a supply shock. They do not erase geopolitical danger.
Rabobank made the same point from another angle. The bank said the agreement reduces immediate risks for the global economy, but leaves unresolved questions over future administration of the Strait of Hormuz. Iran is considering maritime fees after the 60-day period expires, while US President Donald Trump has already opposed tolls on vessels using the waterway.
So the premium has not vanished because the risk is gone. It has shrunk because the market has less evidence that the risk is still blocking supply today.
Who reads the Hormuz signal differently now?
Different groups are looking at the same Hormuz data and seeing different problems.
| Stakeholder | What the Hormuz signal means now |
|---|---|
| Short-term traders | Flow evidence matters more than diplomatic wording. The question is whether $75 becomes support after the selloff. |
| Producers | Kuwait’s plan to gradually increase production reinforces expectations of better supply availability. |
| Refiners | More reliable crude availability helps planning, but the source material does not show enough detail to assess refinery margin effects. |
| Consumers and policymakers | A sustained crude retreat would matter, but the supplied data does not support direct claims about pump prices or inflation outcomes. |
For investors, the lesson is narrower and more useful than “Middle East risk equals buy oil.” The better rule is: geopolitical rallies need physical confirmation to last.
Retail traders should be especially careful here. A headline can move crude first, but tanker flows can reverse that move fast. Anyone tracking the price action should focus on observable levels and data, not just narratives. For the charting side of that work, see our guide to Best Stock Charting Software for Mac Cuts Through Hype.
Which evidence would turn a risk trigger into a real supply shock?
The current episode offers a clean test case.
Earlier in the crisis, the WTO and AXSMarine tracker showed traceable outbound crude flows through Hormuz had largely stalled. By June, the tracker’s seven-day moving average for crude stayed close to zero for much of the period after early March. It also warned that AIS outages, vessels switching off AIS, or signal spoofing could mean some movements were not captured.
That caveat matters. Shipment data is powerful, but not perfect.
Still, the market’s logic is clear. If cargoes keep moving and restrictions remain lifted, the argument for a large emergency premium weakens. If flows stall again, the premium can return fast.
This is the difference between a risk trigger and a supply shock. A risk trigger scares the market. A supply shock removes barrels.
WTI’s roughly 10% weekly loss suggests traders are no longer willing to pay full price for fear alone. They want proof that supply is actually constrained.
What would confirm or weaken the WTI oil price thesis from here?
The near-term thesis is blunt: the market will keep selling fear unless the fear starts removing barrels.
That thesis would be confirmed if shipments continue through the Strait of Hormuz, previously stranded cargoes keep leaving, and the 60-day Washington-Tehran memorandum holds without new restrictions. Kuwait’s plan to gradually increase production also supports the idea of improving supply availability, based on the facts supplied.
It would weaken quickly if there is a verified shipping interruption, renewed maritime restriction, failure of the 60-day arrangement, or a dispute over maritime fees that changes vessel behavior. Rabobank’s warning on unresolved administration of the Strait is the key watch item here.
Demand is the missing half of the story. The source material does not provide fresh demand data, so claims about a durable lower range for WTI would be premature. For now, the WTI oil price is telling a narrower story: Hormuz remains a major risk trigger, but Friday’s market is no longer treating it as a confirmed supply shock.
Disclaimer: This XOOMAR analysis is for informational and educational purposes only. It is not financial, investment, legal, tax, or professional advice. It does not provide buy, sell, hold, price-target, portfolio, or personalized recommendations. Verify information independently and consult qualified professionals before making decisions.
The Bottom Line
- WTI’s small daily gain suggests traders are reassessing risk rather than betting on a full rebound.
- Resumed crude shipments through the Strait of Hormuz reduce the immediate threat of a supply squeeze.
- The roughly 10% weekly drop shows the market has sharply repriced geopolitical risk.
Originally published on XOOMAR. For more news and analysis, visit XOOMAR.
