Oil Rises on Strait of Hormuz Tensions Despite Modest Vessel Traffic

Oil markets tightened on Friday as traders weighed competing signals from one of the world's most critical shipping passages. Brent crude climbed 60 cents to $106.32 a barrel, a gain of 0.57 percent, while U.S. West Texas Intermediate rose 54 cents to $101.71. The moves came as Iran reported that roughly 30 vessels had transited the Strait of Hormuz since Wednesday evening—a notable flow, though still far below the 140 ships that typically moved through daily before the current tensions.

The underlying anxiety driving prices upward had little to do with the traffic numbers themselves. On Thursday, Iranian personnel seized a ship off the United Arab Emirates coast and directed it toward Iranian waters. A day earlier, an Indian cargo vessel carrying livestock from Africa to the Emirates had sunk in waters near Oman. These incidents, separated by geography but linked by the same geopolitical friction, kept traders focused on the risk that the Strait—through which roughly one-third of the world's seaborne oil passes—could face further disruption.

Yang An, an analyst at Haitong Futures, captured the market's underlying logic: the passage of ships through the waterway had eased some anxiety, but not enough to shift the fundamental dynamic. "Oil prices swung several times yesterday but still closed near the day's high," he said. "Ships passing through the strait eased some market concerns, but not enough to change the strong trend driven by tight supply." In other words, the market's primary concern was not the immediate threat of closure but the structural tightness in global oil supplies—a condition that made any disruption risk feel magnified.

Meanwhile, in Beijing, U.S. President Donald Trump and Chinese President Xi Jinping were in the second day of talks, with the Strait of Hormuz explicitly on the agenda. The White House indicated that both leaders had agreed on the importance of keeping the shipping lane open. Jamieson Greer, the U.S. Trade Representative, underscored this in a Friday morning interview with Bloomberg, noting that China viewed the Strait's security as pragmatically important to its own interests. The diplomatic framing suggested that despite broader tensions between Washington and Beijing, both capitals recognized a shared stake in preventing the waterway from becoming a flashpoint that could destabilize global energy markets.

What emerged from the day's trading was a portrait of a market caught between reassurance and unease. The fact that ships were moving through the Strait offered some comfort. But the seizure and the sinking—concrete reminders that the passage remained contested—kept prices elevated. Traders were essentially pricing in a scenario where the current level of traffic might not hold, where the next incident could tighten the screws further. The oil market, in this reading, was not panicking about an imminent crisis but was refusing to relax its guard either.