Oil Prices Rise as US-Iran Hostilities Disrupt Middle East Supply Routes

Oil prices rose on Friday as renewed US-Iran hostilities and Ukrainian attacks on Russian refineries disrupted supply routes in the Middle East. Brent crude futures settled at $92.68 a barrel, up 76 cents or 0.8%, while West Texas Intermediate (WTI) crude finished at $91.48 a barrel, up 18 cents or 0.20%. The week saw a significant increase in prices, with Brent crude rising 7.6% and US crude gaining nearly 10%.

The rally in oil prices has pushed inflation and government borrowing costs higher around the world, intensifying fears of a slowdown in global economic growth. According to Claudio Galimberti, chief economist at Rystad Energy, 'All sectors of the economy are affected by diesel.' Average US diesel prices hit record highs due to supply disruptions, with a gallon costing $5.85 on average, according to AAA data.

Citi raised its average Brent crude price forecast for the third quarter to $86 a barrel from $80, citing delays in the reopening of the Strait of Hormuz. ANZ analysts also increased their short-term Brent crude forecast to $95 a barrel, with upside risk if the Middle East conflict intensifies.