Oil Prices on Track for Second Weekly Gain Amid U.S.-Iran Conflict

Oil prices are poised for a second consecutive weekly increase as the protracted military conflict between the U.S., Israel, and Iran continues to disrupt critical supply routes in the Middle East. The ongoing geopolitical risk has pushed both major benchmarks to their highest levels in nearly a month.

Price Action

According to a Reuters report, international benchmark Brent crude futures were trading around $93.82 a barrel in early Friday trading, while U.S. West Texas Intermediate (WTI) crude futures stood at $86.78 a barrel. The minor moves came after a strong week for the energy market.

Over the past five sessions, prices have climbed significantly, reaching their highest points since July 24:

• Brent has gained more than 7%.
• WTI has climbed more than 8%.

Supply Risks from Middle East Conflict

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The primary driver for the rally is persistent concern over supply disruptions stemming from the stalemated war that began on February 28. Market participants are focused on Tehran's blockade of the Strait of Hormuz, a critical chokepoint for global energy flows. Prior to the conflict, the waterway handled shipments equivalent to about one-fifth of global oil consumption.

Shipping traffic remains severely curtailed. A report on Wednesday noted only nine vessels transited the strait, a figure far below pre-war levels, highlighting the ongoing impact on global supply chains.

Diplomatic Stalemate and Economic Pressure

Hopes for a de-escalation faded this week as a peace deal expired without any move to restart negotiations. U.S. President Donald Trump intensified tensions by threatening "economic warfare and isolation on an unprecedented scale" against Iran and any country providing it with support, Reuters reported.

In a sign of the growing regional fallout, the United Arab Emirates suspended all financial and economic transactions with Iran this week. "Both sides are dug in but lacking the luxury of time to play the waiting game, against a backdrop of crude prices grinding unerringly higher," IG analyst Tony Sycamore said in a note on Friday.