Oil prices saw a slight retreat on Friday, with Brent crude falling 0.77% to $105.10 per barrel and WTI declining nearly 1% to $97.04. Despite these daily drops, WTI is poised for a weekly gain exceeding 5.6%, driven by ongoing supply concerns in the Middle East.
The International Energy Agency (IEA) warned that the global diesel shortage, triggered by the Iran war, will persist until at least the second half of 2027. To stabilize prices, the IEA accelerated the release of crude oil stocks, while the G7 pledged to release 100 million barrels of diesel and other reserves. Additionally, the U.S. lifted sanctions on Russia, allowing it to supply millions of barrels of diesel to global markets.
Norbert Rucker, head of economics and next-generation research at Julius Baer, noted that current oil market levels 'still seem somewhat lofty compared to market realities.' He emphasized that while flows out of the Middle East have largely recovered, the Iran war has erased the surplus built in 2025 rather than causing a deficit.
Gulf oil producers have adapted by pushing tanker transfers as far as India’s coast and slashing prices to maintain crude flow to Asia. Shipping analytics company Vortexa reported 82 ship-to-ship transfers in India's Gulf of Kutch last month, totaling about 680,000 barrels per day.