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Oil prices dipped slightly on Friday but remain on track for their largest weekly gain since 2022, driven by ongoing supply concerns linked to Middle East tensions and potential disruptions in the Strait of Hormuz. Brent crude futures fell 0.82% to $84.71 per barrel, while US crude dropped 1.26% to $79.99. Despite the daily decline, both benchmarks have surged over 8-17% this week amid fears of prolonged geopolitical instability and reduced oil flows. The market reaction highlights the delicate balance between supply risks and US policy interventions. The US Treasury’s decision to ease restrictions on Indian purchases of Russian oil and Secretary Doug Burgum’s statement about reviewing price-stabilization measures have introduced short-term volatility. Goldman Sachs’ warning that Brent crude could exceed $100 per barrel if Hormuz disruptions persist underscores the market’s sensitivity to regional conflicts. For traders, the key focus is on how long Middle East tensions will impact supply chains and whether US policy actions will mitigate price pressures. Investors should monitor developments in the Strait of Hormuz, OPEC+ production decisions, and the effectiveness of US energy policy. The 17% weekly gain in Brent crude suggests strong speculative positioning, but risks remain elevated due to geopolitical uncertainties.
