Crude prices moved lower this week as improving oil flows through the Strait of Hormuz eased supply concerns and reduced the market's focus on geopolitical risk. WTI traded down roughly $7/bbl over the course of the week, while Brent also posted weekly losses as crude exports from the Persian Gulf steadily recovered. Although isolated security incidents remained a concern, the market increasingly viewed supply disruptions as temporary rather than prolonged.

Evidence of that recovery became more apparent throughout the week. Crude exports from the Persian Gulf climbed to at least 75% of pre-conflict levels as producers worked through a backlog of delayed cargoes. More than 170 million barrels of crude have now exited the region since the U.S.-Iran peace agreement was reached, while Saudi Aramco resumed loadings at its Ras Tanura export terminal after a four-month suspension. Although overall tanker traffic remains below historical averages, each additional cargo moving through the Strait reinforced confidence that Middle East exports are continuing to recover. As those flows improved, the geopolitical risk premium that pushed crude prices higher earlier this month continued to unwind.

The market briefly refocused on regional security after a cargo vessel was struck near Oman on Thursday. Despite the attack, tanker traffic continued moving through the Strait of Hormuz, and oil exports remained largely uninterrupted. Rather than triggering another rally, the incident reinforced the market's growing confidence that global crude flows would continue despite lingering geopolitical tensions.

Diplomatic developments also contributed to the week's bearish sentiment. Secretary of State Marco Rubio said the United States remains committed to reaching an agreement with Iran but rejected any proposal that would impose tolls on vessels transiting the Strait of Hormuz. President Trump echoed those comments, calling such a proposal "unacceptable." Continued negotiations reduced expectations of another immediate escalation that could threaten global oil supplies.

This week's trading reflected a broader shift in market sentiment. Earlier in the month, crude prices climbed as the market priced in the possibility of prolonged disruptions to one of the world's most important oil shipping lanes. As exports resumed and tanker traffic

gradually increased, confidence in global crude supplies improved, allowing prices to retreat from the highs reached during the conflict. While the region remains volatile, the market increasingly views supply interruptions as temporary rather than long-lasting.

Outside the Middle East, supply headlines remained mixed. Kazakhstan reduced production at one of its largest oil fields after a drone attack disrupted operations at a Russian processing facility supporting the field. Ukraine also launched additional drone strikes against Russian refineries, raising the potential for tighter refined product supplies. Meanwhile, Iraq clarified that it is not considering leaving OPEC, after earlier comments suggested the country could reconsider its membership if production quotas were not adjusted. Domestic fundamentals also reinforced the week's bearish tone. The latest Energy Information Administration (EIA) report showed U.S. commercial crude inventories fell by 6.1 million barrels while refiners continued operating at a strong 96.1% utilization rate. Gasoline and distillate inventories both increased, however, and implied gasoline demand softened compared to the previous week, indicating fuel supplies remain adequate despite strong refinery activity. The combination of healthy refinery operations and comfortable product inventories suggested the domestic market remains well supplied despite ongoing geopolitical uncertainty.

Prices in Review

Crude prices trended lower this week as easing geopolitical tensions and improving oil flows through the Strait of Hormuz reduced supply concerns. Crude opened the week at $76.49 on Monday before falling to $74.14 on Tuesday. Prices continued lower on Wednesday to $73.13 and reached the weekly low of $69.95 on Thursday. Crude recovered modestly on Friday, climbing to $71.44, but remained well below the week's opening level. Overall, crude prices declined by $5.05 over the week, representing a 6.60% decrease.

Diesel prices trended higher this week as wholesale markets reacted to ongoing geopolitical developments and stronger refined product pricing. Diesel opened the week at $3.1315 on Monday before edging lower to $3.1187 on Tuesday. Prices reversed course on Wednesday, climbing to $3.1508, and continued higher to $3.1570 on Thursday. The rally accelerated on Friday, with diesel reaching the weekly high of $3.2710. Overall, diesel prices increased by $0.1395 over the week, representing a 4.45% increase.

Gasoline prices experienced mixed trading this week before ending slightly higher. Gasoline opened the week at $2.9846 on Monday and increased to $3.0119 on Tuesday. Prices then moved lower, falling to $2.9487 on Wednesday and reaching the weekly low of $2.8688 on Thursday. Gasoline rebounded on Friday, climbing to $3.0078 to finish the week above Monday's opening price. Overall, gasoline prices increased by $0.0232 over the week, representing a 0.78% increase.