Crude oil futures retreated on Friday as growing signs of higher-than-expected oil flows through the Strait of Hormuz eased supply concerns while markets digested reports that Venezuela is weighing an exit from OPEC.
Front-month West Texas Intermediate crude dropped more than 1% to $82.56 per barrel, while Brent futures eased 0.7% to $89.06/bbl.
The downward move came as markets shifted focus away from stalled diplomatic efforts and toward mounting evidence of a recovery in energy shipments through key regional waterways, analysts noted.
Despite persistent roadblocks in diplomatic talks to resolve the US-Iran conflict, signs of additional crude moving through the Strait of Hormuz have intensified.
"We've been assuming oil flows through this key chokepoint have averaged 5m b/d. However, some suggest volumes could be as high as 6-8m b/d," ING analysts said.
Persian Gulf producers are increasingly shuttling crude directly through the strait, while others find alternative routes to sell oil entirely outside the chokepoint.
Beyond immediate supply dynamics, the Organization of the Petroleum Exporting Countries faces potential structural contraction.
OPEC faces the possible exit of Venezuela from the group following the UAE's departure earlier this year, ING analysts noted on Friday.
"Venezuela entertaining the idea should not be too surprising, given that the US has taken control of Venezuelan oil sales," ING added.