Oil prices declined on Friday but still managed to secure notable weekly gains amid escalating military tensions between the United States and Iran. Concerns over potential disruptions in global energy supplies, particularly through the Strait of Hormuz, have driven this volatility.
Brent crude closed at $76.01 per barrel, while the US benchmark, West Texas Intermediate (WTI), settled at $71.41 per barrel. Despite the dip on Friday, Brent experienced an increase of over 5% throughout the week, and WTI saw a rise of nearly 4%, largely propelled by fears of supply interruptions.
The week was marked by significant fluctuations in crude prices as the US and Iran engaged in military exchanges, heightening uncertainty about the security of the Strait of Hormuz. This waterway is critical for global oil transit, and any threats to its safety can significantly impact market stability.
Some market optimism emerged from reports suggesting that the US remains open to diplomatic dialogue with Iran, despite the ongoing military friction. However, the situation was complicated further when Washington revoked a waiver allowing limited Iranian oil exports, which could tighten global supplies further.
Shipping through the Strait of Hormuz has noticeably slowed, with fewer large oil tankers navigating the passage. Iran has issued warnings of potentially imposing more restrictions on commercial traffic if military actions persist, while the US has committed to ensuring freedom of navigation in the area. Analysts caution that oil prices are likely to remain unpredictable as investors continue to watch developments in the Middle East and any potential moves toward resolving the conflict.