Brent crude futures fell 70 cents, or 0.85%, to $81.79 a barrel by 1303 GMT, while US West Texas Intermediate declined 53 cents, or 0.69%, to $76.76. Both benchmarks were on course for weekly losses of more than 9%, reflecting renewed expectations that diplomatic efforts could reduce the disruption surrounding the waterway.
The Strait of Hormuz is a critical energy corridor through which roughly one-fifth of global oil and liquefied natural gas normally passes. Its disruption has therefore increased the risk premium embedded in energy prices and complicated planning for refiners, shippers, manufacturers and transport operators.
The latest market reaction reflects the difference between the prospect of an agreement and the practical restoration of trade. Iran is reportedly seeking fees equivalent to between 5% and 7% of cargo values for vessels using the strait, while Oman has discussed fees of around 3%. Washington opposes the imposition of such charges. Industry sources have also questioned whether the arrangement could operate under existing US sanctions and insurance restrictions.
The uncertainty has kept energy markets highly sensitive to diplomatic developments. A credible reopening could reduce transportation and supply-chain costs while easing some inflationary pressure. A failed arrangement, by contrast, could restore the risk premium that pushed oil sharply higher earlier in the week.
The consequences extend beyond crude. Shipping companies must consider insurance availability, payment restrictions and the possibility that vessels could face legal or security exposure while transiting the waterway. Refiners and commodity traders must similarly assess whether discounted cargoes can actually be transported.
Saudi Arabia's security concerns add another layer of risk. Riyadh has warned of possible attacks on economic and energy infrastructure, while Saudi Arabia, Pakistan and Turkey signed a joint defence agreement on Friday.
What to watch: the terms of any Iran-Oman arrangement, US sanctions policy, shipping-insurance decisions and actual vessel movements through Hormuz. Market confidence will depend less on diplomatic statements than on whether commercial shipping resumes at scale.
