Global oil markets extended their rally at the close of the week, as investors priced in prolonged geopolitical risk from the ongoing Iran conflict and growing doubts over a near-term ceasefire.
Brent crude rose by $4.56, or 4.2 per cent, to $112.57 per barrel, while West Texas Intermediate (WTI) gained $5.16, or 5.5 per cent, to settle at $99.64. Both benchmarks posted modest weekly gains, but the broader trend remains sharply upward.
Since late February, just before coordinated strikes involving the United States and Israel, Brent has risen 53 per cent, with WTI up 45 per cent, underscoring the scale of disruption now embedded in energy markets.
Concerns over restricted flows through the Strait of Hormuz, a key artery for global crude shipments, are driving the current rally, with analysts warning that prolonged disruptions could keep a significant risk premium embedded in oil prices.
The conflict has already removed an estimated 11 million barrels per day from global supply, according to the International Energy Agency (IEA), which described the crisis as more severe than the oil shocks of the 1970s. Market participants are increasingly focused on the duration of the disruption rather than diplomatic signals.
Investor scepticism has also grown around negotiations led by Donald Trump, particularly after Iranian officials dismissed recent proposals as unbalanced. Additional U.S. troop deployments to the Middle East have further dampened expectations of a swift resolution.
“The market is becoming immune to optimistic rhetoric,” analysts at Ritterbusch & Associates noted, highlighting the shift toward pricing in sustained conflict rather than short-term developments.
Outlook scenarios remain highly divergent. Analysts at Macquarie Group said prices could ease if tensions de-escalate but would likely remain above pre-conflict levels. However, a prolonged war could push crude toward $200 per barrel, amplifying global inflation risks.
Further uncertainty looms from Russia, where producers have warned of potential supply disruptions from Baltic ports following attacks on energy infrastructure, adding another layer of strain to already tight markets.
