A diplomatic headline sent crude sharply higher Thursday afternoon. By Friday morning, most of that move had reversed, even as the number of vessels actually transiting the Strait of Hormuz kept falling.
Crude oil broke sharply higher Thursday afternoon, with West Texas Intermediate rising 2.26% to $84.09 a barrel and Brent climbing 2.64% to $88.99, a move tied to a newly reported diplomatic contact between Qatari and Iranian officials in Tehran. By Friday morning, most of that gain had reversed: WTI traded at $83.09, down 0.53% on the day, and Brent at $88.14, down 0.43%, putting oil on track for a weekly loss even as tensions with Iran continue. Thursday's rally followed a report that President Trump said he is not interested in returning to previous deal terms with Iran, remarks relayed secondhand rather than from a direct transcript.
While the price swung in both directions, a slower-moving indicator kept moving one way. Strait of Hormuz vessel traffic fell to seven ships transiting on Thursday, down from 17 the day before and below the 10-day average of 15, a single-day drop of more than half in preliminary shipping data.
The price move reversed faster than the shipping data. Thursday's rally followed one reported diplomatic comment, while Friday's give-back came against a broader supply backdrop that still includes rising Gulf output. Vessel traffic, meanwhile, stayed below average for a second straight session and fell by more than half day over day. Price is already looking past part of this week's tension; the physical traffic data has not yet shown the same reversal.
Today marks six months since the U.S. and Israel launched major combat operations against Iran, and markets have widely been described as having grown "accustomed to stalemate with no end in sight." That description sits uneasily next to a week that saw a nearly 3% single-session swing followed by a partial reversal.
A clearer picture will likely come from a disclosed cause for Thursday's drop in vessel traffic, confirmation of Trump's remarks from additional sources, and whether Friday's reversal or Thursday's spike proves closer to the week's real trend as more sessions of price and traffic data come in.