TLDR
- Brent crude heads for approximately 5% weekly increase, with WTI climbing around 4%, even as Friday sees minimal movement
- Washington conducted additional airstrikes on Iran’s military infrastructure Thursday aimed at safeguarding Strait of Hormuz navigation
- Tehran responded with projectile and drone strikes targeting Bahrain, Kuwait, Qatar, and Jordan
- President Trump announced the tenuous ceasefire had essentially collapsed following attacks on merchant ships
- Traders anticipate the hostilities will remain limited, keeping Persian Gulf oil shipments largely intact
Crude oil benchmarks maintained stability on Friday yet were positioned to conclude the week with substantial gains following renewed hostilities between Washington and Tehran that unsettled energy traders earlier this week.
U.S. West Texas Intermediate crude dipped 0.1% to reach $72.01 per barrel during Friday’s session. Brent crude declined 0.07% to settle at $76.25. Notwithstanding the subdued Friday performance, both major benchmarks were tracking toward robust weekly advances — Brent climbing approximately 5% while WTI rose roughly 4%.
The week’s price momentum stemmed from escalating hostilities surrounding the Strait of Hormuz, among the globe’s most critical petroleum transit corridors. Recent assaults on merchant vessels in and near the strategic waterway led several maritime operators to postpone or abandon scheduled journeys.
Washington Launches Strikes, Tehran Retaliates
On Thursday, the United States executed an additional wave of airstrikes targeting military installations within Iranian territory. U.S. officials stated the operations were designed to diminish Iran’s capacity to endanger commercial navigation through the Strait of Hormuz.
Tehran countered with ballistic missile and unmanned aerial vehicle attacks on multiple nations allied with Washington, encompassing Bahrain, Kuwait, Qatar, and Jordan. Market observers characterized the exchange as among the most extensive military confrontations since the previous month’s provisional ceasefire arrangement.
President Donald Trump declared the assaults on commercial shipping had effectively terminated the ceasefire. He cautioned that the United States would deliver more aggressive responses should Iran target vessels once more.
Notwithstanding Trump’s admonition, diplomatic engagement persisted. Iranian Foreign Minister Abbas Araghchi conducted discussions with officials from Saudi Arabia, Oman, and Turkey in efforts to forestall broader regional conflict.
Traders Perceive Minimal Threat to Petroleum Flows
Analysts at IG noted in their assessment that oil’s measured price reaction demonstrates increasing market conviction that hostilities will remain constrained rather than evolving into an extended regional emergency.
They highlighted that U.S. military operations have focused on Iranian defense installations, avoiding oil production or export infrastructure. Persian Gulf petroleum shipments have proceeded with minimal disruption.
Tanker movements through the Strait of Hormuz have steadily recovered since the June accord reopened the passage. Nevertheless, traffic remains beneath pre-confrontation volumes as insurance providers and vessel operators continue evaluating exposure.
IG indicated the primary bullish catalysts for oil would emerge if Washington imposed stricter limitations on Iranian petroleum exports or if combat directly impacted energy infrastructure or maritime corridors.
Presently, Gulf shipments have remained consistent and regional reluctance to interrupt commercial maritime activity has helped limit additional price appreciation.
Traders are now monitoring weekend developments attentively, including potential military actions, tanker activity patterns, and indications that Persian Gulf crude exports might begin experiencing delays.
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