Oil markets inched higher on Friday as tensions escalated between the United States and Iran, making traders cautious again. This reversed the sharp losses recorded earlier in the week, when prices had fallen on hopes of a diplomatic breakthrough between the two nations and the possible reopening of the Strait of Hormuz.
Price Movements
West Texas Intermediate crude reached $96.66, up 1.95%, after recording earlier gains of 3%. Brent crude was trading at $101.6, up 1.52%, as of 7:05 am IST. The rise followed the US military's announcement on Thursday that it had launched retaliatory strikes on Iranian targets linked to attacks on American forces. Iran, however, accused Washington of violating the ceasefire, claiming US forces targeted two ships in the Strait of Hormuz and struck civilian areas.
Earlier Declines
Only days earlier, oil was moving sharply in the opposite direction. On Wednesday, prices fell and global stock markets advanced amid expectations that the United States and Iran were moving closer to an arrangement that could allow crude shipments to resume through the Strait of Hormuz. Brent crude, which had traded above $115 a barrel earlier in the week, dropped 7.8% to $101.27. Prices briefly fell below $97 before climbing again after President Donald Trump warned he would launch bombing at a much higher level and intensity if Iran rejected his proposed agreement.
Strait of Hormuz Concerns
The status of the Strait of Hormuz remains a major concern for the global economy. The conflict has effectively shut off a crucial route for oil tankers leaving the Middle East region, raising fears over disrupted supply and sustained inflation. A breakthrough that reopens the passage could help restore oil movement and reduce broader price pressures.
Suspicious Trading Activity
Alongside the geopolitical turmoil, concerns are also mounting over suspiciously timed market activity aligning with oil price moments. According to Reuters, bets worth up to $7 billion were placed across multiple exchanges, fuel products, and derivatives during March and April before major Iranian policy announcements by US President Donald Trump. The scale far exceeds the previously disclosed $2.6 billion and has already added to concerns over possible misuse of sensitive information. Reuters reported in April that the US Commodity Futures Trading Commission is examining the trades, according to a person familiar with the matter, though the regulator has not publicly confirmed any formal investigation.
Geopolitical Tensions
Meanwhile, tensions in the Middle East have continued to intensify after the US and Israel launched joint strikes on Iran on February 28. In retaliation, Tehran tightened its grip on the crucial Strait of Hormuz, the world's oil pipeline that carries 20% of global energy supplies.
