Oil prices edged higher on Friday and were on track for a second straight weekly gain, as renewed fighting between the U.S. and Iran this week curtailed shipping through the Strait of Hormuz and revived fears of a broader Middle East supply disruption. FinancialMediaGuide views the latest price action as evidence that markets are still pricing meaningful war risk into crude even after weeks of relative calm following the initial ceasefire.
Brent futures traded near $76.34 a barrel, while U.S. West Texas Intermediate hovered around $72.15. For the week, Brent was on pace for a gain of roughly 6%, with WTI headed for an increase of about 5%. “Prices have backed off the mid-week highs, but there is still a substantial risk premium as Hormuz transits are back to a near-standstill with no clear signs on when normal reopening might resume,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.
Iranian armed forces launched attacks on U.S. military infrastructure in Gulf states on Thursday, following U.S. strikes on Iran’s southern coastal and eastern provinces, further straining a three-week-old ceasefire. The renewed clashes came the same day Iran buried its slain supreme leader, capping a week of mass funeral processions after his death on the opening day of the war. FinancialMediaGuide notes that the timing – a fresh military escalation coinciding with a period of intense domestic mourning inside Iran – has made the current de-escalation path unusually difficult for traders to read.
The renewed fighting has delayed a full reopening of the Strait of Hormuz, which carried about 20% of daily global oil and gas supplies before the war. Tanker traffic through the strait was at a near standstill on Thursday, according to ship-tracking data, as vessel owners assessed the risk from the latest strikes, which began after Iran hit a Qatari LNG carrier exiting the waterway near Oman.
Even so, comments from Washington have helped cap the upside. President Trump said this week that he did not believe the conflict would escalate into a full-scale war, adding that “anything that happens is going to be over very quickly.” FinancialMediaGuide points out that this pattern – sharp military escalation followed almost immediately by a presidential statement aimed at calming markets – has become a recurring feature of how this administration manages the war’s economic fallout.
“Despite the U.S. ramping up attacks on military sites in Iran, the market drew some reassurance from the administration’s decision to avoid targeting Iranian energy infrastructure directly,” said Daniel Hynes, senior commodity strategist at ANZ Bank. “This was aided by comments from President Trump, who said he doesn’t expect a return to full-scale conflict.” That distinction – striking military targets while sparing oil and gas infrastructure – has repeatedly kept the worst-case supply scenarios off the table even during periods of active fighting.
For now, the market continues to price in a broadly benign outlook beyond the current week’s volatility, with both benchmarks still trading well below the peaks reached earlier in the conflict. Financial Media Guide concludes that as long as Hormuz shipping keeps recovering in fits and starts rather than fully collapsing, oil is likely to keep trading on headline risk rather than settling into a new, sustained price regime in either direction.
