Oil prices recovered from earlier declines to trade broadly flat during Asian hours on Friday, while remaining on track for a substantial weekly rise as the escalating conflict in the Middle East fueled concerns about disruptions to global crude supply.
As of 01:49 ET (06:49 GMT), Brent crude futures for May delivery slipped 0.2% to $85.25 per barrel, while U.S. West Texas Intermediate (WTI) crude futures were down 0.3% at $80.75 per barrel.
Brent had surged nearly 5% in the previous session, reaching its highest level since July 2024, while WTI jumped more than 8%.
If the current momentum holds, both benchmarks are set to climb by more than 18% over the course of the week.
Middle East tensions continue to support prices
Some investors locked in profits following the sharp rally earlier in the week, but oil prices remained supported as geopolitical tensions intensified and concerns lingered about the safety of key global shipping routes.
The conflict in the Middle East entered its seventh day on Friday, with hostilities involving the United States, Israel and Iran continuing to escalate. Missile strikes, retaliatory attacks and disruptions affecting energy infrastructure across the region have kept global oil markets on edge.
U.S. President Donald Trump said he wanted a role in determining Iran’s next leader once the conflict ends.
Oil markets have rallied strongly this week, with particular attention centered on the Strait of Hormuz, a narrow passage between Iran and Oman that represents the world’s most vital oil transit route.
Approximately 20% of global oil supply passes through the Strait of Hormuz each day, making it a critical chokepoint in the global energy trade. Any interruption to shipments through the passage could sharply tighten supplies and drive prices significantly higher.
“The market remains well supported with few signs of de-escalation in the Middle East and a resumption of energy flows in the region,” ING analysts said in a note.
“Clearly, with every day that goes by without flows resuming, the oil market will reprice the amount of supply lost, leaving room for prices to move higher,” they added.
U.S. allows India to continue buying Russian crude
In an effort to ease some of the supply concerns, the United States said it would temporarily permit India to purchase Russian oil for a period of 30 days.
“While this might help put some immediate downward pressure on the market, it is not a game-changer. The only way for prices to come down on a sustained basis is a resumption of oil flows through the Strait of Hormuz,” ING analysts wrote.
Analysts warn that the sharp rise in crude prices could intensify global inflation pressures, particularly if the conflict disrupts supply for an extended period. Higher energy costs may also complicate the policy outlook for central banks, including the U.S. Federal Reserve.
Leave a Reply