WTI slides toward $80.50 amid profit-taking and rising vessel activity in the Strait of Hormuz.

WTI crude oil extended its losses during the early European session on Friday, falling nearly 2.6% on the day to trade around $80.50 per barrel. The decline was driven by profit-taking after recent gains and signs of increased oil tanker activity through the Strait of Hormuz, easing concerns over potential supply disruptions.

Market sentiment was also influenced by ongoing geopolitical tensions in the Middle East. Iran’s Parliament Speaker warned that the United States would “pay the price” for the deaths of Iranian civilians, highlighting the risk of further escalation in the region. Despite these tensions, improving shipping flows through the key oil transit route weighed on crude prices and limited support from geopolitical risk premiums.

West Texas Intermediate (WTI) crude oil traded near $80.50 per barrel during Friday’s early European session, retreating as investors locked in profits following the previous day’s strong rally despite persistent geopolitical tensions in the Middle East.

The decline was also fueled by signs of improving oil flows through the Strait of Hormuz. Shipping activity has increased in recent days, with the US reporting that its navy helped escort tankers through the strategic waterway. Data from Kpler showed that 14 commodity vessels passed through the Strait on Wednesday, a notable increase from the single-digit traffic levels recorded last week, easing some concerns over supply disruptions.

Nevertheless, escalating tensions in the region continued to provide underlying support for oil prices. Iranian Parliament Speaker Mohammad Bagher Ghalibaf warned that the United States would “pay the price” for the deaths of Iranian civilians. Meanwhile, Iran’s Islamic Revolutionary Guard Corps (IRGC) announced strikes on US military bases in Kuwait, Jordan, and Bahrain in response to US attacks on a facility located on Iran’s Qeshm Island. The IRGC also reiterated that the Strait of Hormuz would remain closed and vowed retaliation against what it described as aggressors.

Additional support came from stronger-than-expected US inventory data. The US Energy Information Administration (EIA) reported that crude oil stockpiles fell by 7.167 million barrels in the week ending July 24, significantly exceeding market expectations for a 2.5 million-barrel draw. This followed a 2.011 million-barrel increase recorded in the previous week, highlighting robust demand conditions.

Looking ahead, market participants are closely watching the upcoming OPEC+ meeting on August 2. Analysts at ING anticipate the group will approve another production increase of approximately 188,000 barrels per day for September. Such a move would complete the reversal of the 1.65 million barrels per day in voluntary production cuts introduced in 2023. However, reports suggest OPEC+ may halt further supply increases after September, indicating a more measured approach to future output policy.