The prospect of an agreement reducing risks around the Strait of Hormuz encouraged investors to unwind part of the geopolitical premium that had supported crude prices. Supply expectations also weighed on the market. Oil prices recovered some ground toward the end of the week as uncertainty around the Strait of Hormuz continued to provide a degree of support. The Bottom Line:The sharp weekly decline shows that oil prices are responding to a combination of lower geopolitical risk and stronger supply expectations. However, continued uncertainty around the Strait of Hormuz means the market remains sensitive to any reversal in diplomatic or shipping developments.