The Week in Oil : Crude Tumbles After Iran Says Hormuz Strait Is Open But Markets Await Clarity

By Giulia Petroni

Here's a look at what happened in oil markets in the week of April 13-17 and what the focus will be in the days to come.

OVERVIEW: Oil prices plunged more than 10% on Friday after Iran said the Strait of Hormuz would be completely open to commercial ships following the cease-fire between Israel and Lebanon. In afternoon European trading, Brent crude for June delivery was at $89 a barrel, while West Texas Intermediate futures for May are at $84 a barrel.

MACRO: The stock-market rally is extending into the weekend, with U.S. futures edging higher after the S&P 500 and Nasdaq closed at fresh record highs. Both indexes are on track for their strongest three-week run since 2020, led by a renewed surge in tech stocks as investor appetite rebounds.

Broader sentiment has also been supported by growing optimism over a potential U.S.-Iran deal, with talks possibly resuming soon. Meanwhile, easing oil prices are tempering inflation concerns and prospects of higher interest rates.

GEOPOLITICAL RISKS: Iran's foreign minister said in a post on X that "the passage for all commercial vessels through Strait of Hormuz is declared completely open for the remaining period of ceasefire." The 10-day truce between the Israeli military and the Iran-backed Lebanese militant group Hezbollah began on Friday.

President Trump, however, said shortly afterward that the U.S. naval blockade on Iranian ports would "remain in full force." Markets remain cautious, awaiting clarity on whether this will translate into actual changes in Hormuz shipping flows and whether a broader agreement can be reached in the coming days.

Trump said earlier that U.S. might hold discussions with Iran this weekend.

Meanwhile, France and the U.S. were set to host a virtual meeting of dozens of countries on Friday to discuss plans to restore shipping access to the Strait of Hormuz after the conflict ends.

SUPPLY AND DEMAND: Exports through the Strait are down about 90%, according to the International Energy Agency. The disruption has also driven a widening disconnect between futures and physical markets: spot crude prices have surged toward $150 a barrel, far outpacing futures, while refined products-especially middle distillates-have hit record highs as buyers scramble to replace Middle Eastern cargoes.

In its latest monthly report, the IEA said global oil demand is now expected to contract by 80,000 barrels a day, a sharp reversal from its previous projection of 640,000 barrels a day of growth. Meanwhile, OPEC's crude output plunged in March, as the near-closure of the Strait of Hormuz forced key producers to curb production and reroute exports through alternative channels.

WHAT'S AHEAD: Oil markets remain highly headline-driven, with price action increasingly tied to developments around U.S.-Iran diplomacy rather than underlying fundamentals. The focus is now squarely on when and where U.S. and Iranian officials will meet, with talks potentially resuming as soon as this weekend. On next week's U.S. economic calendar, investors will be watching retail sales, jobless claims, PMI data and consumer sentiment ahead of the following week's Federal Reserve meeting.

Write to Giulia Petroni at [e-mail]

(END) Dow Jones Newswires

04-17-26 1026ET