WTI near $97, Brent near $104 as oil reacts to Hormuz developments

WTI crude was trading near $97 a barrel and Brent was near $104 on May 25 as oil markets responded to renewed focus on the Strait of Hormuz, the narrow waterway between Iran and Oman that carries a large share of the world’s seaborne crude. (eia.gov) The move kept crude prices elevated after weeks in which traders had been repricing supply risks linked to Gulf shipping. U.S. Energy Information Administration data shows the strait remains the single most important oil chokepoint in the world by volume. (eia.gov) The immediate issue for traders is not only whether the waterway is formally open, but whether tankers are moving through it at normal rates. (bloomberg.com) Bloomberg reported on May 20 that flows had picked up as several supertankers passed through the strait, a sign that government-level transit arrangements were helping some cargoes move. Earlier reporting from CNBC said recovery in tanker traffic could take time even after any ceasefire or diplomatic easing. ### Why does one waterway move oil prices this much? The Strait of Hormuz carried about 20.9 million barrels a day in the first half of 2025, equal to about 20% of global petroleum liquids consumption, according to the EIA. (eia.gov) The agency also said the route accounts for about one-quarter of global maritime oil trade, making it a critical outlet for producers in the Persian Gulf. The EIA said in a separate analysis that 2024 flows through Hormuz averaged 20 million barrels a day and that first-quarter 2025 volumes were broadly steady. That scale means even partial disruption can add a risk premium to crude benchmarks because buyers must account for delays, rerouting and possible production shut-ins. (bloomberg.com) ### What are traders actually watching right now? Tanker traffic is one of the clearest short-term indicators. Bloomberg’s May 20 Hormuz tracker said the passage of two Chinese very large crude carriers, followed by a South Korean vessel, amounted to one of the biggest 24-hour oil flows in more than a month. That suggested some cargo movement was resuming, but it did not establish a full return to normal shipping patterns. (eia.gov) Shipping recovery can lag political announcements. CNBC reported on April 9 that analysts expected Hormuz traffic to take weeks or months to normalize, citing the way earlier maritime disruptions in the Red Sea slowed the return of vessels and insurers. (eia.gov) ### How much of this is about physical supply versus market psychology? Brent rose from $69 to $74 a barrel between June 12 and June 13 during an earlier episode of regional tension even without a complete blockage of maritime traffic, the EIA said in a May analysis. That price response showed how quickly crude markets can react when traders see a higher probability of disruption in the Gulf. (bloomberg.com) EIA Administrator Tristan Abbey said on April 7 that the agency’s petroleum forecasts were highly contingent on assumptions about the duration of any Hormuz closure and the scale of production outages tied to it. That framing has kept the market focused on both transit conditions and upstream supply losses rather than on shipping headlines alone. (cnbc.com) ### Which countries and fuels are most exposed? Iran’s neighbors on the Gulf rely on Hormuz to move crude and petroleum products to Asia and Europe. The EIA said the route is also important for liquefied natural gas, with about 20% of global LNG trade transiting the strait in 2024, primarily from Qatar. (eia.gov) That leaves refiners, commodity traders and shipowners watching vessel-tracking services, insurance conditions and official Gulf transit guidance. The next concrete signals are likely to come from daily tanker movements through Hormuz and any updated shipping advisories from companies and regional authorities. (bloomberg.com) (eia.gov 1) (eia.gov 2)