Oil prices fall as US reduces Iran’s grip on Hormuz

Oil prices eased ​1% on Tuesday, May 5, 2025, on signs the United States Navy ‌is loosening Iran’s grip on the Strait of Hormuz, potentially opening up supply from the Middle East.

The U.S. on Monday launched a new operation aimed at reopening the strait to shipping.

Maersk later said the Alliance Fairfax, a U.S.-flagged vehicle carrier, exited the Gulf via the strait accompanied by the U.S. military, easing ​some supply disruption fears.

Brent oil futures for July fell 51 cents, or 0.5%, to $113.93 per barrel at 0622 GMT after ​settling up 5.8% on Monday, while U.S. West Texas Intermediate (WTI) crude fell $1.55, or 1.5%, to $104.87, after gaining 4.4% ⁠in the previous session.

The chief market analyst at KCM Trade, Tim Waterer, ​said: “The successful escorted exit of the Maersk-operated vessel has helped ease some immediate supply disruption fears.

“It shows that limited safe passage is possible under current conditions and helps chip away at some of ​the worst-case supply disruption fears. However, it’s still very much a one-off event rather than a full reopening.”

Oil prices soar after Iran hits US warship in Hormuz

Iran launched attacks in the Gulf on Monday to counter the U.S. move as they wrestle for control over the Strait of Hormuz, which connects the Gulf to wider markets ​and typically carries oil and gas supply equal to about 20% of global demand every day.

Several commercial vessels were reportedly struck in ​the area, while a key oil port in the United Arab Emirates (UAE) was set ablaze after an Iranian strike, Reuters reported.

Trump’s attempt to use the U.S. ‌Navy ⁠to free up shipping is the war’s biggest escalation since a ceasefire was declared four weeks ago.

The U.S. is pushing to open Hormuz to ease a massive disruption to global energy supplies since Iran mostly shut the strait after the U.S. and Israel started the war on February 28.