Oil Prices Climb Amid Weekend Uncertainty
Rising Oil Futures Amid Regional Tensions
Oil futures have experienced a notable increase as markets react to the ongoing concerns surrounding the Strait of Hormuz and the potential for prolonged conflict. The situation has led to heightened war anxiety, particularly ahead of the weekend. Arlan Suderman of StoneX highlighted that despite President Trump’s decision to extend the deadline for attacks on the Iranian energy sector, crude markets have added a risk premium overnight due to fears of tighter global oil supplies before any meaningful relief is seen.
Global crude supply is expected to decrease by 13% for some time, and even if the conflict were to end immediately, it would take weeks or months for supplies to stabilize while infrastructure is repaired. This uncertainty has contributed to the rise in oil prices, with WTI settling up 5.5% at $99.64 a barrel for a weekly gain of 1.3%. Brent crude also saw an increase of 4.2% to $112.57 a barrel, although it remains 0.3% higher on the week.
Recovery in Early U.S. Trade
In early U.S. trade, oil futures have shown signs of recovery after experiencing overnight losses. This follows President Trump’s extension of the deadline for attacking Iranian energy infrastructure. Neil Crosby of Sparta Commodities noted that while there was more talk about deferring U.S. strikes on the Iranian grid, the market remains aware of the buildup of U.S. military power and Iranian intransigence. He also mentioned the tendency towards a flurry of events over the weekend when markets are closed.
WTI is currently up 2.6% at $96.94 a barrel, and front-month Brent is up 2.5% at $110.67. However, both benchmarks are still lower on the week as the market cautiously monitors efforts toward talks to end the conflict.
Weekly Declines as Trump Extends Pause for Iran Energy Strikes
Despite the pause on attacks, oil prices are on track for weekly declines. President Trump decided to pause strikes on Iran’s energy sector for an additional 10 days, though markets remain on edge due to conflicting signals regarding negotiations to end the war. Trump stated that the extension was at Iran’s request, but mediators indicated that Iran did not ask for additional time.
The Wall Street Journal reported that the Pentagon is considering sending up to 10,000 additional ground troops to the Middle East. In early European trading, Brent crude rose 1% to $102.88 a barrel, while WTI was up 0.8% to $91.87 a barrel. Analysts at Sucden Financial noted that the Middle East conflict remains unresolved, with continued strikes and no meaningful progress on reopening the Strait of Hormuz, keeping the risk premium in energy markets firmly intact.
Oil Falls on Trump Pausing Attacks on Iran’s Energy Sector
Oil prices fell in early trade after President Trump announced he would pause attacks on Iran’s energy sector for another 10 days, as per Iran’s request. In a Truth Social post, Trump stated that “talks are ongoing” with Tehran. This move could ease traders’ concerns over supply disruptions in the Middle East. However, oil’s losses might be somewhat limited by mediators indicating that Iran hasn’t requested a 10-day pause on strikes on its energy plants.
Mediators also mentioned that Tehran has yet to deliver a final response to a 15-point plan to end the war. Front-month WTI crude oil futures are down 1.8% at $92.80 per barrel; front-month Brent crude oil futures are 2.0% lower at $105.85 a barrel.
