Oil Market Rallies, Brent Price Increases by 6.4% in 5 Days
Oil market rallied, prices on track for a second consecutive weekly gain as uncertainty over the Strait of Hormuz and rising US pressure on Iran keep concerns over global supply elevated
International benchmark Brent crude traded at $94.16 per barrel, up 6.4% from last Friday’s close of $88.52. US benchmark West Texas Intermediate (WTI) crude traded at $87.08 per barrel, up 5.7% from $82.40 a week earlier.
Uncertainty over the Strait of Hormuz has kept a geopolitical risk premium in oil prices.
Supply concerns intensified after Iran reiterated that it would not reopen the strategic waterway until the US fulfils its commitments under a memorandum of understanding, including lifting the blockade and oil sanctions and ending military operations.
Tensions increased further after US President Donald Trump ruled out extending the framework agreement with Iran as its 60-day negotiating period expired without a broader settlement.
The lack of progress raised concerns that the diplomatic deadlock could further disrupt energy shipments through the strait.
Trump has claimed that Washington has “total control” of the Strait of Hormuz through its blockade, while Tehran maintains that the waterway remains under Iranian control.
The conflicting claims have added to uncertainty over the security of oil shipments through one of the world’s most important energy routes.
Concerns over shipping security also increased during the week following reports of a tanker detention near Iran’s Qeshm Island and rising tensions between Iran and the United Arab Emirates (UAE).
The UAE suspended all trade and financial transactions with Iran after reporting that two Iranian ballistic missiles had been launched toward maritime traffic. Tehran denied responsibility for the launches.
The developments raised concerns over a wider regional escalation and possible disruptions to oil supplies and shipping through the Strait of Hormuz, supporting prices.
Meanwhile, further support came from a sharp decline in US emergency crude stocks.
The US Energy Information Administration (EIA) data showed the Strategic Petroleum Reserve (SPR) fell by 5.3 million barrels to 293.4 million barrels, its lowest level since 1982, in line with the US Department of Energy (DOE) data released earlier in the week.
The drawdown fueled concerns over Washington’s ability to cushion the market against potential supply disruptions amid heightened geopolitical risks in the Middle East.
Washington’s plans to intensify economic pressure on Tehran also added to supply concerns later in the week.
US Vice President JD Vance said Washington had entered a “new phase” in its war against Iran, with economic pressure becoming its “most effective tool,” while US Treasury Secretary Scott Bessent pledged the “toughest sanctions in history.”
The measures raised concerns over further restrictions on Iranian oil exports, although their ultimate impact on supplies remains uncertain as Tehran is already subject to extensive US sanctions.
On the other hand, gains were limited by signs of increased tanker traffic through the Strait of Hormuz and a rise in US commercial crude inventories.
US officials cited by Axios said the US military had established a shipping corridor through the strait, allowing 15 to 20 tankers to pass through its southern channel each night and facilitating around 10 million barrels of oil flow per day, roughly half the pre-war level.
Meanwhile, the EIA data showed commercial crude inventories rose by 4.4 million barrels last week, easing concerns over tight supplies in the world’s largest oil-consuming country.
Oil Jumps, Brent Tops $91 as US Rules Out Iran Truce Extension
