Tensions Fuel Oil Rally as Hormuz Concerns Persist

Oil prices held steady on Friday but remained poised for significant weekly gains as tensions between the US and Iran continued to escalate.

The Strait of Hormuz, a critical waterway through which a large portion of global oil supplies pass, remains at the center of the conflict. Following a series of military strikes earlier this week, including a reported attack on an area hosting a wedding in southern Iran, the situation has heightened concerns over disruptions to energy flows.

According to data from the Energy Information Administration, US commercial crude stocks fell to about 424.5 million barrels in the week ended August 28, down from 428.9 million barrels a week earlier. This decline in inventories is adding support to oil prices as traders weigh the potential impact of ongoing hostilities on global supplies.

ING analysts noted that while escalation between the US and Iran is propping up crude, the rally may lose traction if Hormuz shipments continue smoothly.