TLDR
- Brent crude climbed past $111 per barrel while WTI approached $106, marking a 12% weekly gain
- Crude prices have jumped over 25% during the past fortnight as the Strait of Hormuz continues blocking shipments
- Tehran’s Supreme Leader pledged to retain control of the waterway while defending nuclear and missile capabilities
- ConocoPhillips alerted markets about “critical shortages” facing import-reliant countries beginning in June
- American crude shipments reached unprecedented volumes as international markets sought alternatives to Middle Eastern supplies
Global oil markets witnessed continued upward momentum Friday as the U.S.-Iran standoff stretched into its third month, leaving a crucial petroleum transit corridor effectively impassable.
Brent crude futures for July delivery crossed the $111-per-barrel threshold. West Texas Intermediate traded near $106. Both key benchmarks posted approximately 12% gains for the week and have climbed over 25% across the past fourteen days.
The Strait of Hormuz, previously transporting approximately 20% of worldwide petroleum before hostilities commenced, remains functionally closed. This disruption has created turbulence across international energy markets and triggered dramatic price volatility in recent weeks.
President Donald Trump stated the American naval blockade surrounding Iranian ports continues delivering results and will remain active. Earlier comments suggested hopes that economic measures might encourage Tehran toward negotiations, though diplomatic discussions have essentially stagnated.
Supreme Leader Mojtaba Khamenei of Iran delivered an uncommon public declaration Thursday, asserting that Tehran would maintain its nuclear and missile development efforts. He additionally confirmed Iran’s intention to preserve authority over the Strait of Hormuz.
The pronouncement offered minimal prospects for immediate de-escalation. While a ceasefire arrangement between Washington and Tehran holds, meaningful diplomatic advancement has proven scarce.
Supply Crunch Warning
ConocoPhillips Chief Financial Officer Andy O’Brien cautioned analysts Thursday that certain nations might encounter “critical shortages” of petroleum beginning as early as June.
He detailed that tanker vessels departing the Persian Gulf during late February have completed their voyages. This temporary cushion has evaporated, meaning nations with substantial import dependencies could experience pressure within coming weeks.
“We are going to start to see some import-dependent countries potentially start to face critical shortages as we get into the June-July time frame,” O’Brien said.
Thursday reports also indicated Trump was evaluating additional military approaches, including forced reopening of the strait, launching further strikes against Iranian targets, or capturing Iranian enriched uranium via special operations forces.
Physical Market Tightness Builds
ANZ analysts observed the spread between paper oil prices and physical market valuations is contracting. This development signals genuine supply constraints are materializing for the first time since the conflict’s outbreak.
American crude shipments jumped to record heights last week as global purchasers pivoted toward U.S. producers to compensate for unavailable Middle Eastern volumes.
Japan’s leading currency authority stated readiness to engage in crude oil futures markets, where speculative activity has influenced the yen. Japanese officials entered currency markets Thursday to purchase yen, triggering the sharpest decline in the Bloomberg Dollar Spot Index since January.
Trading activity registered below typical levels across Asian markets Friday, with multiple major economies including China, Germany, and France observing Labor Day closures.
Brent’s June delivery contract reached expiration Thursday following a climb to four-year peaks exceeding $126 per barrel.
