Oil prices concluded the week with a decline on Friday, yet they experienced notable weekly increases as escalating military tensions between the United States and Iran sparked concerns over global energy supplies and the security of shipping routes through the Strait of Hormuz.
Brent crude finished at $76.01 per barrel, while the US benchmark, West Texas Intermediate (WTI), settled at $71.41 per barrel. Despite the downturn on Friday, Brent saw a weekly rise of more than 5%, and WTI climbed nearly 4%, driven by worries about potential supply disruptions.
Throughout the week, crude prices exhibited significant volatility as the US and Iran engaged in military exchanges, heightening the uncertainty regarding the Strait of Hormuz, a critical corridor for oil transit globally. The market experienced a slight improvement in sentiment with reports suggesting that the US remains open to diplomatic talks with Iran, despite ongoing military tensions. Nevertheless, anxiety persists following the US’s decision to revoke a waiver allowing limited Iranian oil exports, thereby intensifying the pressure on global supply.
Shipping through the Strait of Hormuz has noticeably decreased, with fewer large oil tankers navigating the passage. Iran has issued warnings about potentially further restricting commercial traffic if military actions continue, while the US has reiterated its commitment to maintaining freedom of navigation in the area.
Analysts anticipate continued volatility in oil prices as investors closely watch developments in the Middle East and any potential advancements toward resolving the conflict.