Global oil markets edged higher on Friday, though crude prices remain on track for their steepest weekly decline since June as geopolitical tensions continue to disrupt supply routes and investor sentiment.
Benchmark crude futures saw modest gains, with Brent crude rising 56 cents, or 0.58%, to $96.48 a barrel. West Texas Intermediate climbed 65 cents, or 0.66%, to $98.52. Despite the daily increase, both benchmarks have fallen roughly 11 to 12 percent over the week.
The broader decline follows a ceasefire agreement reached earlier this week between the United States and Iran, brokered by Pakistan. The truce, however, has failed to fully stabilise the situation, with continued fighting and ongoing disruptions to global supply routes.
A key pressure point remains the Strait of Hormuz, where traffic has reportedly fallen below 10 percent of normal levels. Tehran has tightened control over the waterway, warning vessels to remain within its territorial waters, further restricting movement through one of the world’s most critical energy corridors.
Analysts say the disconnect between futures and physical markets is widening. Ole Hansen of Saxo Bank noted that while futures pricing suggests partial normalisation, real-world supply conditions continue to signal scarcity. He said the global oil system remains far from stable due to constrained shipping flows.
Additional supply concerns emerged after Saudi Arabia reported damage to energy infrastructure. The Saudi Press Agency said attacks on energy facilities have reduced production capacity by around 600,000 barrels per day and cut East-West Pipeline throughput by about 700,000 barrels daily.
According to estimates from JPMorgan, nearly 50 energy infrastructure assets across the Gulf have been damaged over the past six weeks, with about 2.4 million barrels per day of refining capacity taken offline since the conflict began in late February.
The conflict intensified after strikes by the United States and Israel on Iran triggered broader regional instability, disrupting shipping routes and energy production across multiple countries.
Some pressure on prices emerged after Lebanon announced plans to join US and Israeli representatives in Washington next week for talks aimed at discussing a ceasefire related to the wider conflict involving Iran and its regional allies.
Iran has also proposed charging transit fees for vessels passing through the Strait of Hormuz under any future agreement, a suggestion rejected by Western governments and international shipping authorities.
Despite diplomatic efforts, the market remains highly sensitive to developments in the region. Analysts say sustained disruption to key shipping lanes and energy infrastructure continues to underpin volatility, even as short-term price movements fluctuate on ceasefire expectations.
