Oil Prices Plunge on Strait of Hormuz Ceasefire, Bakken Differential at -$3.42

Oil prices plummeted Friday and remain sharply lower, with West Texas Intermediate crude trading at $82.59 per barrel, down $8.58 or 9.41%, according to live market data. The sell-off was triggered by Iran's announcement that it would reopen the Strait of Hormuz during a ten-day ceasefire, easing fears of a prolonged global supply disruption.

Brent crude settled at $90.38, down $9.01, while the Bakken differential to WTI stood at -$3.42. The Strait of Hormuz is a chokepoint for about a fifth of the world's oil, and its promised reopening "bolstered sweeping optimism that the US-Iran conflict will reach an end," Rigzone reported, citing Bloomberg. Iran's Foreign Minister stated the waterway is "completely open" for commercial shipping, though analysts noted restrictions may apply.

The dramatic price drop represents a rapid unwind of the geopolitical risk premium built during the seven-week conflict. "The market is now pricing that the war and the closure of the Strait is over," said Arne Lohmann Rasmussen of Global Risk Management, according to the report. However, the physical market remains tight, and BankPro CEO Paolo Broccardo warned prices could rebound sharply on any diplomatic setback, as the return of full supply volumes could take weeks.

For Bakken operators, the steep decline in the benchmark price directly pressures wellhead economics. The local Bakken differential of -$3.42 means Bakken crude is priced even lower, at approximately $79.17 per barrel. This sudden compression in revenue follows a period of elevated prices and complicates near-term cash flow and drilling plans. The price volatility underscores the basin's exposure to global geopolitical shocks.

Despite the plunge, longer-term price projections have been raised. The U.S. Energy Information Administration increased its 2026 and 2027 forecasts for gasoline and diesel, citing higher crude oil prices. The EIA now sees U.S. regular gasoline averaging $3.70 per gallon in 2026 and diesel averaging $4.80, according to its April Short-Term Energy Outlook. It forecasts diesel could exceed $5.80 per gallon this month, driven by high crude costs and refining margins.

Analysts suggest a new trading range may be forming. "Zaye Capital Markets sees oil consolidating within the $90-$100 range," according to a separate Rigzone report, with direction hinging on diplomatic progress. The ceasefire and talks over Iran's nuclear program, mentioned by U.S. President Donald Trump, are key drivers. However, with details murky and Iran warning against a continued U.S. blockade, the situation remains fluid, promising continued market volatility for Bakken producers.