Global oil prices are showing a significant increase on Friday, linked to heightened concerns about the resumption of hostilities in the Middle East and restrictions on energy resource supplies.
This is reported by Finway
Financial Markets React to Tension
Brent crude oil futures rose by 99 cents (0.94%) to reach $106.06 per barrel. Meanwhile, West Texas Intermediate crude oil futures increased by 71 cents (0.73%) to $96.56 per barrel. For the week, Brent has risen by 17.13%, while WTI has increased by 15.13%. This marks the second-largest weekly increase since the start of the war in the Middle East.
Following the closure of the Strait of Hormuz, which occurred due to the escalation of the conflict between the U.S., Israel, and Iran, about 20% of global oil and liquefied natural gas supplies have been cut. The further rise in oil prices on Thursday by more than 3% was triggered by news of targets being destroyed by air defense over Tehran and internal political confrontations in Iran between radical and moderate forces.
Market Outlook and U.S. Actions
U.S. President Donald Trump commented on the situation, noting that Iran has likely “slightly” increased its stockpiles of weapons during the two-week ceasefire. He emphasized that American military forces are capable of destroying these stockpiles in one day. A report from Haitong Futures states that the ceasefire increasingly resembles a preparatory stage for a major conflict. If negotiations between the U.S. and Iran do not yield tangible results by the end of April, and hostilities resume, oil prices could reach new annual highs.
“If negotiations between the U.S. and Iran do not achieve significant progress by the end of April and hostilities resume, oil prices could reach new annual highs,” the Haitong Futures report states.
Iran released a video showing special forces landing on a cargo ship in the Strait of Hormuz. Against this backdrop, U.S. President Donald Trump stated that he would not impose strict deadlines for resolving the conflict with Iran but aims to reach a “great deal” for settlement.
Prolonged supply disruptions could lead to global crude oil and petroleum product stocks falling to five-year seasonal lows by the end of May – early June. This, according to Chief Energy and Chemical Researcher at China Futures Min’yu Gao, will be an additional factor driving up prices.
U.S. President Donald Trump emphasized that he does not seek a quick end to the war with Iran, as time works against Tehran. He also ordered the Navy to open fire on boats that are mining the Strait of Hormuz.