Oil prices held steady on Friday as uncertainty over Middle Eastern supplies continued to support the market, with no immediate resolution to the conflict in sight.
Brent crude futures traded around $105.8, while West Texas Intermediate (WTI) crude stood at $97.71. Both benchmarks remained on course for weekly gains, with WTI up 6% and Brent rising roughly 1% over the week.
Reports that Washington was considering easing restrictions on some sanctioned oil tankers, alongside the International Energy Agency’s (IEA) pledge to release the remaining 100 million barrels under its coordinated supply agreement, provided some support to market sentiment.
However, persistent supply concerns and escalating security risks in the Middle East continued to keep prices elevated.
US considers easing restrictions on oil tankers
Washington is reportedly considering lifting sanctions on some vessels belonging to the so-called shadow fleet, which transports oil from countries including Russia, Iran and Venezuela.
The move is aimed at easing pressure on oil transportation and curbing rising freight rates, offering a possible route to improving the flow of crude into global markets.
The IEA’s planned release of the remaining 100 million barrels under its supply agreement has also helped sentiment, as governments seek to offset disruptions and improve the availability of oil.
However, these developments have done little to eliminate concerns about the durability of global supplies. Even with production and exports recovering toward pre-war levels in recent weeks, rising attacks around the region’s critical shipping routes have renewed fears of further interruptions.
Strait of Hormuz remains key risk
The biggest source of pressure continues to be the Middle East, where attacks on energy infrastructure and commercial vessels are increasing transportation costs and adding to the risk premium built into oil prices.
Iran said Friday that it would reopen the Strait of Hormuz if the United States left the region. The statement comes as attacks around the vital waterway have increased over the past 10 days.
Iran has said the escalation in strikes is a response to the US blockade of its ports. The continuing confrontation has left traders uncertain about how reliably oil can move through the Gulf.
The Strait of Hormuz is a critical route for global energy shipments, and further disruption could tighten supplies and push prices higher.
The prospect of further attacks means that even barrels continuing to leave the Gulf carry an additional security premium, keeping prices elevated despite efforts to improve supply availability.
Storm loading after calm?
William Blair energy research analyst Neal Dingmann has warned that the market could face a further sharp spike in prices.
He told Yahoo Finance on Friday that major energy executives were concerned about the possibility of a so-called “super spike” if supply disruptions intensified.
Billionaire investor Paul Tudor Jones has also warned that crude prices may not have reached their peak, arguing that unresolved geopolitical risks leave room for another sharp increase.
“I’m long oil, bullish on oil. I think it can rally another $20 or $25,” Jones told CNBC.
With not much headway in the Middle East conflicts, oil prices seem set to stay elevated at least in the near term.
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