Oil prices are poised for weekly gains despite recent subdued trading, with Brent crude up about 5% and WTI around 4%. This comes as markets balance fresh US-Iran clashes against expectations that the conflict will remain limited in scope and avoid major disruptions to Persian Gulf crude supplies. Brent oil futures eased 0.07% to $76.25 a barrel, while Crude Oil WTI Futures slipped 0.1% to $72.01 a barrel as of 14:18 ET (18:18 GMT).
The latest escalation involved US airstrikes on Iranian military targets, with Iran retaliating against US-aligned countries such as Bahrain, Kuwait, Qatar, and Jordan. This follows attacks on commercial vessels near the Strait of Hormuz earlier in the week, prompting shipping operators to reconsider transits. While tanker traffic has partially recovered since a June agreement, it remains below pre-conflict levels.
Analysts from IG suggest that the relatively muted oil market reaction indicates growing confidence that this flare-up will not become a prolonged regional conflict. They noted that US strikes have targeted military infrastructure rather than oil production facilities, and crude flows from the Gulf have remained stable. Any significant upward pressure on oil prices would likely come from tighter restrictions on Iranian crude exports or direct threats to energy infrastructure or shipping in the Strait of Hormuz.
The Strait of Hormuz is a crucial chokepoint, through which a fifth of global oil supplies passed before the conflict. The US revoked a sanctions waiver that permitted Iranian oil sales, intensifying economic pressure on Tehran. Saudi Arabia has also cut oil prices for Asian buyers to ensure quick absorption of millions of barrels amid regional uncertainty. Despite these tensions, analysts expect a return to negotiations rather than a full-scale war, with diplomatic efforts ongoing involving Iranian Foreign Minister Abbas Araghchi and counterparts from Saudi Arabia, Oman, and Turkey.
