Oil heads for biggest weekly gain since mid-July on rising US-Iran tensions

• Brent crude reached $95.67 per barrel and WTI hit $91.56, with weekly gains of 7.1% and 9.8% respectively, the steepest since the week ended July 20
• Israeli Defense Minister warned Israel would 'cripple' Iran's military and civilian infrastructure including energy facilities, while the U.S. refuses talks unless Iran stops attacking commercial shipping in Hormuz
• Iraq increased oil exports to 2.34 million barrels per day in August from 1.35 million bpd in July, benefiting from Iranian approvals for Iraqi tankers to transit the Strait of Hormuz

Summary: Oil Heads for Biggest Weekly Gain Since Mid-July on US-Iran Tensions

Key Price Movements:

Oil prices posted significant weekly gains on Friday, September 4, with Brent crude rising 7.1% to $95.67 per barrel and WTI surging 9.8% to $91.56—marking the steepest weekly increases since the week ending July 20.

Primary Drivers:

Escalating US-Iran hostilities are heightening Middle East supply concerns. US attacks this week resulted in dozens of casualties, including Iranian civilians, representing the fiercest clashes between the nations since July. The conflict, which began with US-Israeli strikes in late February, has now entered its seventh month.

Geopolitical Developments:

• Israeli Defense Minister Israel Katz threatened to "cripple" Iran's military and civilian infrastructure, specifically targeting energy facilities
• US Vice President JD Vance stated Washington will not hold talks with Iran unless Tehran stops attacking commercial shipping in the Strait of Hormuz
• Iran expanded its list of non-compliant vessels subject to fines, confiscation, or detention when transiting the strait

Supply Impact:

Iraq increased oil exports to approximately 2.34 million barrels per day in August from 1.35 million bpd in July, with September exports also expected to rise. This increase was facilitated by heavy discounts and Iranian approvals for Iraqi tankers, as Iraqi vessels remain among the few cleared to pass through Hormuz.

Market Limitation:

Russian President Vladimir Putin indicated a potential diplomatic path forward, noting both the US and China support a peace settlement, which capped oil's advance.

Market Implications:

The Strait of Hormuz disruption risk remains the primary concern for global oil supply, with geopolitical tensions supporting elevated price levels.