Oil prices ease as recovering Hormuz Strait traffic tempers war premium

Oil prices extended declines Friday as signs of a recovery in crude flows through the Strait of Hormuz eased supply concerns, after a resumption of hostilities between U.S. and Iran had sent them higher.

West Texas Intermediate futures for September delivery dropped 1.62% to $82.24. Brent crude futures, the international benchmark, fell by 0.98%% to $88.16 a barrel.

Commonwealth Bank of Australia said in a note on Friday that stronger oil flows through the Strait of Hormuz had eased market concerns after U.S.-Iran strikes earlier this week briefly pushed Brent above $93 a barrel.

The bank estimates traffic through the vital waterway has recovered to roughly 30%-35% of pre-war levels, adding that a rebound to around 50%-60% of normal flows could be enough to reassert oversupply conditions in the global oil market.

Investors also weighed President Donald Trump's call to add tariffs on Iran to a bipartisan sanctions bill targeting Tehran and Russia.

While sanctions against the two countries have widespread support in the Congress, Trump's well-established belief in tariffs as a one-size-fits-all tool for economic coercion is polarizing.

The U.S. imported just $1.4 million in goods from Iran in 2025, according to the Office of the U.S. Trade Representative. Works of art, collectors pieces and antiques were the largest category of those imports, making up 55% of the value, according to Trading Economics.

"I'd like to see tariffs on Iran. It would make it much stronger," Trump said of the bill, which would impose economic sanctions on Russia and those supporting its war against Ukraine.

The legislation would also let Trump slap targeted tariffs on goods imported from the top five countries that buy Russian energy and help it evade sanctions.