Oil prices concluded the week on a downtrend on Friday, yet recorded notable weekly increases due to escalating military tensions between the United States and Iran, which have sparked worries over global energy supply and the critical shipping route through the Strait of Hormuz.
Brent crude ended the session at $76.01 per barrel, while the US benchmark, West Texas Intermediate (WTI), closed at $71.41 per barrel. Despite the decline on Friday, Brent saw an increase of over 5% for the week, and WTI rose nearly 4%, driven by potential disruptions in supply.
The week saw high volatility in crude prices as both nations engaged in military confrontations, heightening concerns about the security of the Strait of Hormuz, a vital corridor for oil transit worldwide. Market optimism was somewhat bolstered by reports suggesting that the US is still open to diplomatic talks with Iran, despite ongoing military tensions.
Nonetheless, apprehensions persist after Washington rescinded a waiver that had permitted limited exports of Iranian oil, exerting additional strain on global supply. Meanwhile, shipping through the Strait of Hormuz has noticeably decreased, with a reduction in the number of large oil tankers traversing the passage.
Iran has issued warnings of further restrictions on commercial traffic should military actions continue, while the US has reiterated its commitment to maintaining free navigation in the region. Analysts anticipate that oil prices will remain erratic as investors closely watch developments in the Middle East and any potential advancements toward resolving the conflict.