Oil prices remained firm on Friday and were on track for their strongest weekly performance since mid-July as escalating hostilities between the United States and Iran heightened concerns over potential supply disruptions from the Middle East.
Brent crude oil, against which Nigerian crude oil is priced, traded around $95.52 a barrel, while U.S. West Texas Intermediate (WTI) crude edged up to $91.36. For the week, Brent was up 7.6 percent and WTI had gained 10.4 percent, putting both benchmarks on course for their largest weekly advances since the week ended July 20.
The latest rally has been fuelled by renewed military confrontations between Washington and Tehran. U.S. attacks this week, which reportedly killed and wounded dozens, including Iranian civilians.
The conflict, now in its seventh month, has heightened fears that oil supplies from one of the world’s most critical producing regions could be disrupted.
Market sentiment has also been influenced by the continued threat to shipping through the Strait of Hormuz, a vital maritime corridor for global crude exports.
Iran has expanded its list of vessels it considers non-compliant and subject to detention or confiscation if they transit the waterway, increasing concerns over the security of global energy supplies.
Adding to the uncertainty, Israeli officials renewed warnings that military operations could target Iran’s military and energy infrastructure, raising the possibility of further disruptions to regional oil production and exports.
Analysts at ANZ said the market is entering a more delicate phase, noting that while elevated global inventories initially helped absorb supply shocks, maintaining market balance could become increasingly difficult as those buffers decline.
The bank raised its short-term Brent crude forecast to $95 per barrel, while warning that prices could move higher if tensions continue to escalate.
The rally, however, was tempered by comments from Russian President Vladimir Putin, who said there remains a pathway toward a peace agreement in Ukraine with support from both the United States and China. Any progress toward ending the conflict could ease concerns over global energy supply and moderate upward pressure on crude prices.
Meanwhile, Iraq increased crude oil exports to approximately 2.34 million barrels per day in August, up sharply from July levels, with exports expected to rise further this month as discounted cargoes and approvals for Iraqi tankers transiting the Strait of Hormuz attracted more buyers.
The increase in Iraqi exports has helped offset some supply concerns, although it has not been sufficient to derail the broader rally driven by geopolitical risks.
For now, traders remain focused on developments in the Middle East, with fears of supply disruptions continuing to outweigh concerns over demand.
Unless geopolitical tensions ease or oil flows through key export routes improve significantly, crude prices appear set to close the week with their strongest gains in nearly two months.
