Oil Prices Rise 4% Week-on-Week on Renewed Supply Risk
Oil prices increased 4% week-on-week as renewed US-Iran tensions, uncertainty over the Strait of Hormuz, and attacks on Libyan energy facilities kept global supply concerns in focus.
Brent crude traded at $87.12 per barrel, up 4.27% from last Friday’s close of $83.55. US benchmark West Texas Intermediate (WTI) crude traded at $81.52 per barrel, up 4.27% from $78.18 a week earlier.
Oil prices began the week on a mixed note as investors monitored indirect contacts between Washington and Tehran for signs of progress toward reopening the Strait of Hormuz.
Iranian officials said talks with Oman on establishing a safe maritime route through the strait had made progress but stressed that the discussions did not mean the waterway would reopen.
Brent futures for October delivery later rose above $85 per barrel as uncertainty over US-Iran talks and renewed attacks in the Middle East increased concerns over possible supply disruptions.
Prices rallied Tuesday after US President Donald Trump indicated that further military action against Iran remained possible if diplomacy failed.
A series of drone attacks on energy facilities in Libya also added to supply concerns. The attacks targeted facilities in the western city of Zawiya, prompting warnings that continued strikes could disrupt refinery operations.
Prices remained supported Wednesday after Iran’s parliament advanced legislation that would bar vessels from countries Tehran considers hostile from entering the Gulf through the Strait of Hormuz without Iranian approval.
The move added to concerns over the security of the waterway, through which a significant share of global oil and gas supplies normally passes.
However, the rally lost momentum Thursday after data showed a much larger-than-expected increase in US crude inventories and higher global oil production.
The US Energy Information Administration (EIA) said commercial crude inventories jumped by 17.4 million barrels last week to 424.4 million barrels, compared with market expectations for a 1.7-million-barrel decline.
The increase was partly linked to a 6.1-million-barrel decline in US Strategic Petroleum Reserve (SPR) stocks, as crude released from the emergency reserve moved into commercial inventories.
Oil prices recovered Friday as Washington and Tehran traded conflicting claims over control of the Strait of Hormuz and the US signaled plans to increase economic pressure on Iran.
US Treasury Secretary Scott Bessent said Thursday that Washington planned to impose unprecedented economic measures on Iran, with further announcements expected next week.
“Watch this space for more announcements coming next week because we are going to apply measures like have never been seen in the history of economic isolation on a country,” Bessent said in an interview with Newsmax’s “Rob Schmitt Tonight” program.
Bessent said the measures would combine increased economic pressure on Tehran with restrictions related to the Strait of Hormuz.
“It will be a combination of economic isolation like the world has never seen before, and the continued blockade in the Strait of Hormuz that will keep anything from going in or out of the Iranian ports,” he said.
Renewed geopolitical tensions kept oil prices on course for weekly gains, although the sharp increase in US crude inventories limited the advance. Oil Prices Inch Higher, Brent Nears $90 on Peace Talks Doubt
