WTI crude oil prices recorded their sharpest single-day drop of the year on Friday. The sell-off followed the reopening of the Strait of Hormuz after a 75-day closure.
U.S. President Trump and Chinese President Xi Jinping brokered the de-escalation during a Beijing summit. This agreement ended the U.S.-Iran conflict that previously blocked the critical shipping route.
WTI futures fell below $95 per barrel as the geopolitical risk premium evaporated. Brent crude prices previously exceeded $105 per barrel during the supply shock. WTI prices had hovered near $101 per barrel before the diplomatic breakthrough.
The resolution shifts market focus back toward global demand and macroeconomic indicators.