Oil Prices Wobble as Hormuz Tanker Traffic Returns, Cooling War Fears

Oil prices turned volatile on Friday as shipping traffic through the Strait of Hormuz recovered, easing market anxiety triggered by U.S.-Iran strikes earlier this week. In a note to clients, Commonwealth Bank of Australia said that stronger oil flows through the strategic waterway have reduced concerns about supply disruptions. The bank’s assessment suggests that the so-called “war premium”—the extra cost added to oil prices due to geopolitical risk—is now fading. The Strait of Hormuz is a narrow passage between the Persian Gulf and the Gulf of Oman. Roughly one-fifth of global oil consumption passes through it daily, making it a critical chokepoint for energy markets. When traffic there is disrupted, prices tend to spike on fears of shortages. This week, U.S. military action against Iranian targets raised those fears, pushing prices higher. But with tanker movements returning to normal, traders are recalibrating their positions, causing choppy price swings. Analysts say the situation remains fluid. Any further escalation in the region could quickly reverse the current trend. For now, the market is watching shipping data closely for signs of sustained recovery.