Oil prices have surged to their highest weekly gain since April, with Brent crude nearing $85 per barrel on Friday following an 11% increase over the past week. However, experts suggest that without a sustained disruption in the Strait of Hormuz or a definitive sign of tightening global supplies, it may prove difficult for Brent to surpass the $90 threshold. Meanwhile, the US benchmark, West Texas Intermediate, is approaching $80 per barrel.
This rise in prices comes amid heightened tensions between the United States and Iran, which have impacted supply routes in the Middle East and slowed tanker traffic through the crucial Strait of Hormuz. Despite these regional tensions, Brent crude has been unable to break past the weekly high of $87.55 per barrel, as market analysts predict that ongoing diplomatic efforts could avert a prolonged crisis.
The Strait of Hormuz remains a focal point for energy markets, as approximately 20% of the world’s oil passes through this strategic waterway. Shipping companies are keeping a close watch on the security situation as tanker movements continue to decelerate. The impact of these tensions is already being reflected in fuel markets, with refining margins in the United States rising due to tightening diesel and gasoline supplies, and European fuel markets also experiencing increased pressure.
Further complicating the supply scenario are additional disruptions in Russian exports, which have intensified concerns about global supply constraints. Analysts indicate that for oil prices to decisively climb above $90, there would need to be a significant decline in inventories or an escalation in Washington-Tehran tensions leading to a more extended disruption of Hormuz shipping lanes.
At present, traders are keeping a keen eye on diplomatic developments and supply data, which are expected to play a crucial role in determining the next significant move in the global oil markets.