Crude oil prices rose on Friday and were on track for their biggest weekly gain since mid-July as renewed hostilities between the United States and Iran raised concerns over oil supplies from the Middle East.
Brent crude futures rose 15 cents, or 0.2 per cent, to USD 95.67 a barrel at 0100 GMT, while US West Texas Intermediate (WTI) crude futures gained 26 cents, or 0.3 per cent, to USD 91.56 a barrel.
For the week, Brent crude has gained 7.1 per cent, while WTI has advanced 9.8 per cent. Both benchmarks are headed for their strongest weekly gains since the week ended July 20.
Strait of Hormuz in Focus as Oil Flows Remain Key
The rise in crude oil prices comes as tensions between Washington and Tehran have intensified, raising concerns over the security of oil shipments through the Strait of Hormuz, a key route for global energy supplies.
US President Donald Trump said in a Truth Social post that oil volumes through the Strait of Hormuz were “BACK”. He shared a graphic showing flows at around 18 million barrels per day, compared with 20 million barrels per day previously.
The comments came amid continued uncertainty over the US-Iran conflict and its impact on commercial shipping and energy supplies.
Global market expert Ajay Bagga said Trump’s comments on oil flows through the Strait of Hormuz were significant for the crude oil market.
Trump had said that 15 million barrels of oil were moving out on Wednesday and that the US had full control of the Strait of Hormuz.
“If 15 million barrels are coming out, that is a very big thing because before the war, up to 20 million barrels were moving through the Strait. If 15 million barrels have come back, then most of the crisis is avoided,” Bagga said.
He said oil flows could be taking place through routes along the Oman coast, with ship-to-ship transfers helping maintain supplies.
US-Iran Conflict Raises Supply Concerns
The conflict, which began with US-Israeli strikes at the end of February, has now entered its seventh month. The latest US attacks this week killed and wounded dozens of people, including Iranian civilians.
The developments have increased concerns among oil market participants that further military action could disrupt crude production, exports or shipping in the region.
Israeli Defence Minister Israel Katz also renewed warnings that Israel would “cripple” Iran’s military and civilian infrastructure, including energy facilities.
Any direct damage to energy infrastructure could further increase volatility in crude oil prices, particularly as markets are closely watching oil shipments through the Strait of Hormuz.
The Strait is a major transit route for crude oil and other energy products from the Middle East. Any disruption to the waterway could therefore increase the risk premium in global oil prices.
JD Vance Says No Talks Until Shipping Attacks Stop
US Vice President JD Vance said on Thursday that Washington would not hold talks with Iran unless Tehran stops attacking commercial shipping in the Strait of Hormuz.
Vance said the Trump administration had several options to respond to Iran, including economic, military, diplomatic and covert measures.
“There are a lot of additional tools that we have at our disposal,” Vance said, adding that the US would retain flexibility in deciding how to respond to Tehran.
He also said the US approach was aimed at preventing a wider global energy crisis and defended American military efforts to protect commercial shipping and maintain the flow of oil and gas.
The comments have added to uncertainty over the duration and intensity of the conflict. Any prolonged disruption to shipping through the Strait of Hormuz could have a significant impact on global crude oil markets.
Ajay Bagga Flags Contrasting US, Iran Positions
Bagga said Vance’s remarks on the Iran conflict were significant as they indicated a difference in the US administration’s position on the conflict.
“JD Vance was addressing a White House press conference after around 40 days. A journalist asked him about an American airman who was killed in the Iran conflict and whose wife was not receiving benefits because the US had not officially declared a war,” Bagga said.
Vance, according to Bagga, said the US was not calling the conflict a war.
“He said this is not a war. The first six weeks saw some skirmishes, but this is not a shooting war or a kinetic war. Therefore, we do not call it a war,” Bagga said.
Bagga said the statement was important because Trump had repeatedly referred to the conflict as a war, while Vance was now indicating that the US did not officially consider it a war.
“It also indicates that there is some division within Republican ranks,” he said.
At the same time, Israel has taken a tougher position, saying it could target Iran’s leadership and that the conflict was not over. Iran has also continued its attacks, including missile and drone strikes, Bagga said.
What Could Decide Crude Oil Prices Next?
The conflicting positions between the US and Iran have left the oil market focused on whether the two sides can reach an understanding and maintain oil flows through the Strait of Hormuz.
Bagga said Iran wants the naval blockade to be removed and for the US to move back before it opens the Strait and starts negotiations. The US, however, says talks can begin only after Iran stops attacking ships.
This uncertainty could keep crude oil prices volatile in the near term. However, oil prices remained below their recent highs as there were also signs that diplomatic efforts could eventually ease geopolitical risks.
Russian President Vladimir Putin said there remained a path towards a deal to end the war in Ukraine. He added that both the US and China were prepared to support a peace settlement.
Oil prices are also being influenced by expectations about the broader impact of the conflict on global economic growth and fuel demand.
Meanwhile, the Trump administration has stepped up economic pressure on Iran through a campaign called “Operation Economic Outcast”. US Treasury Secretary Scott Bessent said the campaign would target Iran’s key economic lifelines, including oil, shipping, aviation and digital assets.
The campaign aims to restrict Iran’s access to international financial networks and reduce revenue streams supporting the Iranian government.
For the crude oil market, investors are now closely watching developments around the Strait of Hormuz, further US-Iran military action and any signs of disruption to Middle East oil supplies.
