Oil Heads for Weekly Gain of More Than 10% Amid Escalating U.S.-Iran Tensions

Oil prices edged higher on Friday and remained on track for weekly gains exceeding 10%, as escalating military tensions between the United States and Iran continued to support concerns over potential supply disruptions.

1. Brent crude: US$84.38 per barrel (+0.2%)
2. WTI crude: US$78.71 per barrel (+0.6%)

Geopolitical tensions support prices

Iran's military said it launched fresh strikes on U.S. facilities early Friday, including what it described as its first direct attack inside Syria. The announcement followed a sixth consecutive night of U.S. strikes targeting Iranian military sites.

Iran has repeatedly warned that shipping through the Strait of Hormuz could be affected if hostilities continue.

According to shipping data, vessel traffic through the Strait of Hormuz declined this week, reflecting ongoing operational disruptions and heightened security concerns in the region.

Market still assessing supply risks

"There is a lack of urgency in oil circles at present," said Tamas Varga, analyst at PVM Oil Associates.

According to Varga, without the latest escalation, crude prices could have moved closer to the US$100-per-barrel level, suggesting the market still expects additional supply from producers to offset part of the disruption risk.

U.S. inventory data

According to the U.S. Energy Information Administration (EIA), crude oil inventories fell by 1.7 million barrels to 409.7 million barrels during the week ended July 10, while gasoline inventories declined by 1.5 million barrels.

Industry group API estimated a 564,000-barrel decline in crude inventories over the same period.

Diplomatic efforts continue

Qatar, Egypt and Pakistan were reportedly continuing mediation efforts despite the collapse of June's ceasefire, leaving open the possibility that diplomatic progress could influence market sentiment.

Market participants are expected to remain focused on the Brent-WTI price spread and shipping activity through the Strait of Hormuz, both of which continue to reflect evolving expectations for global oil supply.