Brent crude futures rose above $106 a barrel on Friday, extending a strong weekly advance as continued disruption in Middle East shipping routes and unresolved US–Iran tensions kept global oil markets under pressure.
Brent was trading in the $106–$107 range, leaving it on track for gains of nearly 18% for the week, in what has been a sustained risk-driven rally rather than a single-session spike.
The main driver remains the ongoing disruption to shipping through the Strait of Hormuz, a key global transit route for crude oil and liquefied natural gas. While the waterway remains technically open, traffic has been significantly reduced for several days, with vessels moving under heightened security conditions and elevated insurance costs.
Market participants say the effective slowdown in flows has created persistent uncertainty around near-term supply from major Middle Eastern exporters, even though no formal closure of the route has been declared.
The situation has been compounded by continued geopolitical tension between the United States and Iran, with diplomatic efforts remaining stalled and no clear breakthrough in negotiations over regional security and sanctions-related issues. The fragile ceasefire environment has helped prevent further escalation, but has not eased market concerns.
In parallel, disruptions in the broader region have also affected shipping confidence, with traders increasingly factoring in the risk of intermittent supply delays rather than a complete halt in flows.
Analysts say the market is now pricing in a sustained geopolitical risk premium, as even partial and unpredictable disruptions to key transit routes have been enough to tighten global supply sentiment.
Despite the sharp rise in prices this week, underlying demand conditions remain relatively stable, suggesting that the rally is being driven primarily by supply-side uncertainty rather than consumption strength.
For now, oil markets remain closely tied to developments in the Strait of Hormuz and diplomatic signals from Washington and Tehran, with traders watching for any shift that could ease or further constrain flows through the critical waterway.
