Oil is hovering near $96 per barrel and is heading for its strongest weekly gain since July as renewed US-Iran hostilities raise fresh concerns over oil flows through the Strait of Hormuz.
Brent futures rose to $95.67 per barrel on Friday, putting the benchmark 7.1% higher for the week, while US West Texas Intermediate gained 9.8% to $91.56. Both benchmarks are on course for their biggest weekly advances since the week ended July 20.
The latest pressure on prices is coming from shipping activity. Only four commodity vessels crossed the Strait of Hormuz on Thursday, sharply below the 10-day average of 15, according to Kpler data cited by Reuters. The figure excludes vessels travelling with their tracking systems switched off.
The decline in traffic has added to concerns that the renewed military confrontation could further constrain the movement of crude and fuel through the key waterway.
The rally is also being reinforced by tighter fuel markets. US diesel prices have climbed to record levels, while damage to refineries and limited spare capacity are leaving less room for the market to absorb further supply disruptions.
Brent’s latest move puts the benchmark well above its level earlier in the year, with traders now watching whether the disruption to shipping remains temporary or develops into a more sustained constraint on global supplies.
For oil-importing economies, the prolonged rise in crude and refined fuel prices could add to fuel and transport costs if the pressure persists.
