Oil prices have surged to record their most significant weekly increase since April, driven by tensions in the Middle East. However, analysts suggest that Brent crude’s ascent beyond $90 per barrel is contingent upon a sustained disruption in the Strait of Hormuz or a notable tightening of global oil supplies.
On Friday, Brent crude hovered around $85, having climbed nearly 11% over the week, while the US benchmark, West Texas Intermediate, neared $80. This surge is attributed to renewed geopolitical tensions between the United States and Iran, which have affected supply routes in the Middle East and slowed tanker traffic through the crucial Strait of Hormuz.
Despite the escalating tensions in the region, Brent crude has not surpassed this week’s peak of $87.55 per barrel. Market analysts note that traders are still counting on diplomatic resolutions to prevent a prolonged crisis from unfolding.
The primary concern for energy markets remains the Strait of Hormuz, through which about 20% of the world’s oil supply is transported. The slowdown in tanker movements has prompted shipping companies to closely monitor the security situation. The fuel markets are already feeling the impact, with refining margins in the United States increasing as supplies of diesel and gasoline tighten. European fuel markets are also under mounting pressure, compounded by additional disruptions to Russian exports.
According to analysts, the prospect of oil prices breaking decisively above $90 hinges on either a significant decline in inventories or an escalation in tensions between Washington and Tehran, potentially leading to a prolonged disruption of shipping through Hormuz. For now, traders are focusing on diplomatic developments and supply data to anticipate the next major movement in global oil markets.