Middle East Tensions Keep Oil Prices Elevated
Oil prices took a dip on Friday, but despite the decline, the commodity still managed to notch an 11% weekly gain. The Brent crude price fell by 2.77% to $97.90 a barrel.
The drop was largely seen as a pause in the market's recent upward trend rather than a sign that supply fears are waning. Analysts pointed to several pressure points, including US strikes linked to Iran and continued Houthi activity in the Red Sea.
Despite concerns about disruptions to oil shipments through the Strait of Hormuz, ship-tracking data suggests that traffic has not come to a complete standstill. Kpler showed daily transits through the strait holding steady recently, while crossings at Bab el-Mandeb rose on July 23rd.
JPMorgan estimated that each additional month of disruption could add around $7-8 per barrel to Brent prices, with three months potentially lifting monthly average prices to around $114. The longer disruptions persist, the more today's barrels will matter in the market.