Oil prices settled lower on Friday, with Brent crude falling 0.4% to $89.31 per barrel and WTI declining 0.2% to $83.40, as traders weighed potential Federal Reserve policy changes and growing expectations that an agreement could restore shipping through the Strait of Hormuz. Both benchmarks posted weekly losses, with Brent falling more than 5% and WTI declining more than 4%.

Oil prices remained under pressure as diplomatic efforts to reopen the Strait of Hormuz gained momentum. Mediators are working with Iran on conditions for restoring normal traffic, while shipping flows through the waterway showed signs of a tentative but uneven recovery. Seven commodity vessels transited the strait on Thursday, down from 17 the previous day and below the 10-day average of 15.

At the same time, concerns over tighter monetary policy added pressure to crude prices after Federal Reserve Chairman Kevin Warsh indicated that interest rates could be raised later this year to contain inflation. The prospect of higher rates weighed on expectations for economic growth and future oil demand.

Supply risks remain elevated, however, as disruptions continue across the Middle East and Russia. Recent estimates put Gulf oil exports at 15–16 million barrels per day, still 7–8 million bpd below pre-war levels. Meanwhile, continued Ukrainian attacks on Russian refineries are tightening global refined-product supplies.

With Hormuz traffic gradually recovering and diplomatic efforts gaining traction, the market is beginning to price in some easing of the supply disruption, although continued geopolitical risks and uneven shipping flows are keeping significant uncertainty in the oil market.