Crude Oil Prices Weaken Amid Dollar Strength and Middle East Tensions
Crude oil prices closed mixed on Friday, with October WTI crude oil (CLV26) dropping -0.13 (-0.16%) and October RBOB gasoline (RBV26) rising +0.0598 (+2.00%). The losses in crude were limited by President Trump's statement that the US has no interest in returning to the terms of the deal with Iran, which cast doubt on oil flows from the Middle East resuming soon.
Oil supplies transiting through the Strait of Hormuz are also bearish for crude prices. Goldman Sachs reported that oil exports from the Persian Gulf have risen to 15 million to 16 million bpd, about two-thirds of pre-war levels. Venezuela's potential departure from OPEC could increase the chances of a price war among remaining cartel members.
Despite easing Middle East tensions and larger supplies moving through the Strait of Hormuz, crude prices had dropped over -8% this week to a 2-week low on Wednesday. The US Treasury Secretary Scott Bessent announced that the US will begin a campaign to sever Iran from the global economy, targeting five of Iran's vital lifelines: digital assets, technology, gold, aviation, and shipping.