Oil set for second weekly rise as unsettled US-Iran war crimps supply

• Shipping through the Strait of Hormuz has plummeted to just nine vessels on Wednesday, far below pre-war levels when the waterway handled about one-fifth of global oil consumption
• President Trump threatened 'economic warfare and isolation on an unprecedented scale' against Iran, with the UAE suspending all financial and economic transactions with Tehran
• Brent crude reached $93.82/barrel and WTI hit $86.78/barrel, their highest levels since July 24, as peace talks remain stalled with no signs of resolution

Market Summary: Oil Prices Surge on U.S.-Iran Conflict Supply Disruptions

Key Price Movements:

Oil prices held steady Friday but remained on track for a second consecutive weekly gain. Brent crude rose 4 cents to $93.82/barrel, while WTI slipped 6 cents to $86.78/barrel. Over the previous five days, Brent surged over 7% and WTI climbed more than 8%, reaching their highest levels since July 24.

Primary Catalyst:

The ongoing U.S.-Israeli conflict with Iran continues disrupting supply from major Middle East producers including Saudi Arabia, Iraq, UAE, and Kuwait. The war began February 28 with U.S.-Israeli military strikes on Iran. Tehran's subsequent blockade of the Strait of Hormuz and attacks on regional energy facilities have severely impacted global oil and gas flows.

Critical Supply Disruption:

Shipping through the Strait of Hormuz—previously carrying approximately one-fifth of global oil consumption—has collapsed dramatically. On Wednesday, only nine vessels transited the waterway, far below pre-war levels, highlighting the severity of supply constraints.

Geopolitical Developments:

• A previous peace deal expired this week with no restart of negotiations
• President Trump threatened "economic warfare and isolation on an unprecedented scale" against Tehran
• UAE suspended all financial and economic transactions with Iran
• Trump warned of consequences for any nation supporting Iran

Market Outlook:

Analyst Tony Sycamore noted both sides remain entrenched without the "luxury of time to play the waiting game" as crude prices continue grinding higher. Thousands have been killed since the conflict began, with no resolution in sight.

The sustained supply disruption from the world's key producing region supports continued upward pressure on oil prices absent diplomatic breakthrough.