Brent crude oil prices might need a more prolonged disruption in the Strait of Hormuz or clearer signs of tightening global supplies to surpass the $90 per barrel threshold. This comes despite Brent recording its largest weekly gain since April. On Friday, the global benchmark hovered around $85, aiming for an 11% weekly increase, while the US benchmark, West Texas Intermediate, neared $80. The surge in oil prices follows renewed military tensions between the United States and Iran, which have disrupted Middle Eastern supply routes and reduced tanker traffic through the Strait of Hormuz—a vital passage for about 20% of the world’s oil flows.
Despite these developments, Brent has struggled to exceed this week’s high of $87.55 per barrel. This is happening even as the conflict spreads across the region and significantly slows tanker movements through Hormuz. Analysts suggest that the market is still hopeful for diplomatic negotiations, which is likely tempering further increases in oil prices. Traders are keenly watching to see if global inventories start to decline sharply and whether the Hormuz disruption becomes more sustained.
Even with the escalating military exchanges, oil markets have shown relative stability. Brent crude has been trading within a narrow range recently, indicating that investors might be expecting the tensions to de-escalate rather than intensify further. The primary concern for energy markets remains the Strait of Hormuz, where tanker traffic has slowed and exporters are increasingly looking for alternative routes to lessen their reliance on this crucial waterway.
The effects of this situation are extending beyond just crude oil. In the United States, refining margins are climbing as diesel and gasoline supplies tighten. Meanwhile, European fuel markets are also beginning to show strain. The reduction in Russian fuel exports has further pressured global energy supplies. Market watchers are now concentrating on two main factors: whether oil inventories will fall enough to indicate a supply shortage and if diplomatic efforts will fail, leading to a longer disruption in the Gulf.
Until one of these scenarios plays out, experts believe that Brent crude is likely to stay below the $90-per-barrel mark, despite the ongoing geopolitical risks. The coming weeks will be crucial in determining whether the current tensions will lead to significant shifts in the energy market or if a resolution will help stabilize prices.