Oil prices were poised to rise for the third consecutive week, notwithstanding a decline on Friday. Investor sentiment was marked by anxiety in light of the continuing conflict between Israel and Iran. Brent crude futures witnessed a decline. Nonetheless, weekly gains remained apparent. Concerns regarding supply disruptions via the Strait of Hormuz sustained elevated prices. Oil prices appeared poised to increase for the third consecutive week, even as they experienced a decline on Friday. Investors remained apprehensive, given that the ongoing conflict between Israel and Iran, now in its second week, exhibited no indications of de-escalation from either party.
Brent crude futures declined by $1.57, representing a 2% decrease, settling at $77.28 per barrel as of 0030 GMT. On a weekly basis, it increased by 3.9%. The U.S. West Texas Intermediate crude for July, which did not settle on Thursday due to a U.S. holiday and is set to expire on Friday, increased by 86 cents, or 1.1%, reaching $76. The more liquid WTI for August increased by 0.7%, or 50 cents, reaching $74. Prices surged nearly 3% on Thursday following Israel’s airstrikes on nuclear sites in Iran, which prompted Iran to launch missiles and drones at Israel after an attack on an Israeli hospital the previous night.
“Oil prices remain elevated as a result of increased tanker rates and vessels circumventing the Strait of Hormuz,” stated Phil Flynn, analyst at The Price Futures Group. “The risk to supply is maintaining a state of alert, despite the absence of significant disruptions in Iranian exports,” Flynn stated. Iran ranks as the third-largest producer within the Organization of the Petroleum Exporting Countries, with an extraction rate of approximately 3.3 million barrels of crude oil per day.
Approximately 18 million to 21 million barrels per day of oil and oil products transit through the Strait of Hormuz, situated along Iran’s southern coastline. There is considerable apprehension that ongoing hostilities may interfere with trade routes, potentially impacting supply levels.
Neither side exhibited any indication of an exit strategy, with Israeli Prime Minister Benjamin Netanyahu asserting that Tehran’s “tyrants” would incur the “full price,” while Iran cautioned against the involvement of a “third party” in the attacks. The White House announced on Thursday that President Donald Trump is expected to determine the U.S. involvement in the Israel-Iran conflict within the next two weeks. The “two-week deadline” represents a strategic maneuver previously employed by Trump in various significant decisions. Frequently, these deadlines pass without definitive measures, which could result in the crude oil price staying high and possibly enhancing recent increases,” stated Tony Sycamore, analyst at IG.