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Crude oil prices closed higher on Friday, capping off a second consecutive week of substantial gains with Brent crude rising over 6.6% and WTI gaining more than 5.6%. The upward momentum was primarily driven by escalating geopolitical tensions and potential supply disruptions in key transit routes, specifically concerning the Strait of Hormuz amid fresh US sanction threats against Iran. Market volatility intensified after maritime tracking data showed a sharp drop in tanker traffic through the strategic waterway, alongside reports of Ukrainian military strikes on a Russian oil refinery in Perm. These compounding geopolitical risks created a strong risk premium in energy markets, offsetting broader macroeconomic concerns regarding global demand. Looking ahead, energy markets remain highly sensitive to supply side shocks and developments in international diplomacy. Investors will be closely watching whether shipping corridors through the Middle East normalize, as well as tracking inventory reports and crude production levels from OPEC+ members in the coming weeks.
