Oil prices traded little changed on Friday, with WTI Crude Oil Futures slipping 0.1% to $72.01 a barrel and Brent Oil Futures easing 0.07% to $76.25 a barrel. Despite Friday's subdued trading, Brent is on track to rise about 5% for the week, and WTI about 4%, after renewed attacks near the Strait of Hormuz briefly heightened fears of supply disruptions.
The latest escalation involved US airstrikes on Iranian military targets on Thursday, intended to degrade Iran's ability to threaten shipping in the Strait of Hormuz. Iran retaliated with missile and drone attacks on US-aligned countries including Bahrain, Kuwait, Qatar, and Jordan. However, the US has not carried out fresh strikes in recent hours and emphasized ongoing "technical talks" and a commitment to a diplomatic resolution, according to Reuters citing US officials.
Analysts from IG noted that crude's relatively muted reaction reflects growing confidence that the latest flare-up will remain limited in scope. US strikes have focused on military infrastructure rather than oil production or export facilities, and crude flows from the Gulf have remained broadly steady. While a sanctions waiver allowing Iran to sell oil without punitive measures was revoked, Saudi Arabia has significantly cut oil prices for Asian buyers to ensure quick absorption of millions of barrels, helping to cap further price increases despite elevated geopolitical tensions.
Concerns about the Strait of Hormuz persist, with traffic falling steeply after attacks on several commercial vessels. Just 23 tankers and cargo ships crossed the waterway on Wednesday, down from an average of 138 ships per day before the conflict. Markets are now monitoring whether military exchanges intensify over the weekend and if Gulf crude exports slow. Despite the tensions, analysts suggest that the market has become accustomed to disruptions in the Strait of Hormuz, limiting the upside potential for oil prices.
President Donald Trump, who previously declared the ceasefire "over" after attacks on commercial shipping, has also stated that the US would respond more forcefully if Iran targeted vessels again. Concurrent diplomatic efforts are ongoing, with Iranian Foreign Minister Abbas Araghchi holding talks with counterparts from Saudi Arabia, Oman, and Turkey, all seeking to prevent the conflict from widening.
