Crude oil set for first weekly close above $100 since May

Global oil prices are positioned to end the week above the 100 dollars per barrel threshold, marking the first such weekly close since mid-May. Although trading values slipped on Friday, both major benchmarks had accumulated gains of more than 10 percent over the preceding five days. The sustained elevation in prices reflects heightened market anxiety regarding supply chain integrity, driven by escalating military tensions and disruptions to critical maritime routes in the Middle East.

As of 07:58 GMT, Brent crude futures were trading at 105.98 dollars per barrel, a decrease of 1.65 dollars or 1.53 percent. Concurrently, US West Texas Intermediate crude fell by 1.36 dollars, or 1.33 percent, to reach 101.12 dollars per barrel. These Friday declines followed a sharp surge of more than 6 percent recorded on Thursday. The recent price easing coincided with reports that Middle Eastern foreign ministers are negotiating a temporary arrangement with Iran to facilitate safe passage for vessels through the Strait of Hormuz.

These diplomatic efforts follow Wednesday incidents in which Iran attacked ten ships near the strait, a move attributed to US targeting of five Iranian oil tankers. The Islamic Revolutionary Guard Corps has warned of further escalation in response to additional attacks. Operational data indicates a significant reduction in maritime traffic, with vessel transits through the Strait of Hormuz dropping to seven on Thursday, down from 11 the previous day and well below the ten-day average of 15. The strait typically handles approximately 20 percent of the world’s daily oil and liquefied natural gas shipments.

Further complications have emerged as Houthi forces aligned with Iran seized control of Yemen’s port of Mocha on Thursday, intensifying concerns over Red Sea trade. The International Energy Agency has revised its outlook, stating that global oil supply and demand will fall more than previously projected this year. This adjustment is due to hostilities delaying the return of normal Middle East oil flows into 2027. Meanwhile, Opec has reduced its forecast for global oil demand growth in 2026 to 380,000 barrels per day, representing its fifth consecutive downgrade. The group has simultaneously raised its estimate for demand growth in 2027, maintaining a less severe assessment of the conflict’s impact on consumption compared to the IEA, which expects demand to decline in 2026.