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Oil prices edged higher on Friday as investors sought clarity following a temporary halt in attacks between Iran and Israel. Brent crude rose 0.8% to $79.35 per barrel, while West Texas Intermediate (WTI) climbed 0.7% to $74.10. The respite in hostilities has eased immediate concerns about supply disruptions in the Gulf, though underlying tensions remain high. Analysts note that any resumption of attacks could reignite volatility in energy markets, given the region's strategic role in global oil exports.
The market's cautious optimism stems from the potential for a de-escalation in the Middle East, which could stabilize oil flows. However, traders are closely monitoring statements from both nations and the possibility of renewed clashes. The U.S. and its allies have also warned of potential military responses to Iranian aggression, adding another layer of uncertainty. For oil-dependent economies, even minor price fluctuations can impact fiscal balances and inflation.
Looking ahead, the focus will shift to OPEC+ meetings and whether production adjustments are needed to offset geopolitical risks. Gulf investors should watch for shifts in U.S. energy policy and regional military movements. A prolonged ceasefire could support prices, while renewed conflict might push oil above $85/bbl. Traders may also consider hedging against volatility using futures contracts.
