Friday, oil prices experienced an increase amid ongoing tensions in the Middle East, which continue to fuel concerns over energy security. The situation has been exacerbated by the seizure of vessels by both the United States and Iran, while the Strait of Hormuz remains closed to maritime traffic. In trading, the international benchmark Brent crude pared earlier gains to rise by 0.63%, reaching USD 105.73 per barrel. Meanwhile, U.S. West Texas Intermediate futures advanced 0.32% to settle at USD 96.17 per barrel.
This upward movement in prices occurred despite an agreement between Israel and Lebanon to extend their truce following a meeting at the White House with senior U.S. officials. President Donald Trump announced the extension on Thursday, stating on Truth Social that the meeting had proceeded very well. The ceasefire, originally intended to last ten days, has now been prolonged to allow additional time for diplomatic negotiations. In support of this process, Washington has pledged to help bolster Lebanon’s defenses against Hezbollah.
Oil Supply Disruptions Escalates
Although the ceasefire between the United States and Iran remains intact, the broader conflict has evolved into a naval blockade that continues to keep the strategically vital Strait of Hormuz closed. Both nations appear to be leveraging the closure to gain economic advantages in pursuit of a favorable deal. According to a note published Friday by the Commonwealth Bank of Australia, the longer the strait remains shut, the higher the economic costs will become, increasing the likelihood that one side will be compelled to relent.
Before the conflict, approximately 20 million barrels of oil and petroleum products were shipped daily through the strait. The bank’s analysts assessed that the United States is likely to be the first to back down due to mounting political and economic pressures, though they also cautioned that a significant military escalation remains a risk, which could substantially strengthen the U.S. dollar.
Fatih Birol, head of the International Energy Agency, stated on Thursday that the world is facing the greatest energy security threat in history. He noted that as of today, 13 million barrels per day of oil have been lost, alongside major disruptions in other vital commodities. Birol, who had previously warned that the Iran war and the closure of the Strait of Hormuz would trigger the largest energy crisis ever encountered, urged governments to enhance their resilience by developing alternative energy sources.
