Oil Prices Rise as Tensions Persist in Middle East Conflict

Oil prices rose on Friday but are set for their first weekly decline since February 9 due to ongoing tensions in the Middle East. US President Donald Trump extended the deadline for Iran to reopen the Strait of Hormuz, giving them until April 6 to comply or face destruction of its energy infrastructure.

The Brent crude benchmark has jumped 53% since February 27, when the US and Israel launched strikes against Iran, but was down 1.1% this week. Analysts at Macquarie Group warned that if the war drags on until the end of June, oil prices could hit $200.

Despite talks of de-escalation, markets are trading on the assumption of prolonged conflict, said Priyanka Sachdeva, analyst at Phillip Nova. The US has sent thousands of troops to the Middle East and is weighing whether to use ground forces to seize Iran's strategic oil hub of Kharg Island.