Market Overview

Oil prices remained subdued on Friday but were positioned for a sharp weekly rise as escalating hostilities between the United States and Iran heightened geopolitical risk premiums.

Price Movements

At 04:10 ET (08:10 GMT), Brent crude futures increased 0.2% to $84.38 per barrel, while U.S. West Texas Intermediate (WTI) futures rose 0.6% to $78.71 per barrel. Both benchmarks were on track for weekly gains exceeding 10%.

Analyst Commentary

Tamas Varga, analyst at PVM Oil Associates, noted a “lack of urgency in oil circles at present” but emphasized that recent significant developments prevented crude prices from reaching triple‑digit levels in recent months.

Geopolitical Developments

Iran’s military announced fresh strikes on U.S. facilities in the Middle East, including its first direct attack in Syria, early Friday. The U.S. military reported a sixth consecutive night of strikes on Iranian military capabilities on Thursday. Tehran continues to threaten to disrupt shipping through the Strait of Hormuz, a chokepoint through which roughly one‑fifth of global oil and fuel supplies pass.

Shipping Activity

Vessel traffic through the Strait of Hormuz dropped sharply this week following the re‑imposition of a U.S. naval blockade on Iranian ports, indicating a slowdown in shipping activity.

Diplomatic Efforts

Regional mediators—Qatar, Egypt and Pakistan—are reported to be continuing talks despite the apparent collapse of a fragile cease‑fire agreement signed in June.

Inventory Data

The U.S. Energy Information Administration (EIA) released data showing crude oil stockpiles fell by 1.7 million barrels in the week ended 10 July, bringing inventories to 409.7 million barrels. Gasoline inventories declined by 1.5 million barrels over the same period.

Earlier in the week, the American Petroleum Institute (API) reported U.S. crude inventories fell by about 564,000 barrels for the same week, a smaller draw than analysts had expected.

Outlook

Traders are weighing the probability of prolonged supply disruptions against the potential for producers to offset any shortfall, while the heightened geopolitical risk premium continues to support price gains.