Oil prices are poised for a weekly rise as tensions intensify
Oil prices were little changed on Friday, but rising US-Iran tensions and fears of supply disruptions due to Ukraine’s attacks on Russian refineries pushed average US diesel prices to record highs. Prices continued their sharpest weekly rise since mid-July.
Brent crude futures were steady at $95.52 a barrel as of 06:45 GMT, while WTI crude futures rose 7 cents, or 0.1%, to $91.36.
However, Brent crude is up 7.6%, and WTI crude is up 10.4%, with both indicators on track for their highest gains since the week ending July 20.
Upside risk remains if the Middle East conflict intensifies.
The war is in its seventh month since it began with US-Israeli attacks in late February. This week's U.S. attacks, which killed and wounded dozens of people, including Iranian civilians, marked the most intense clashes between the two countries since July.
After the US's move, Israeli Defense Minister Israel Katz updated Israel's warnings that it will "cripple" Iran's military and civilian infrastructure, including energy facilities.
The market is entering a delicate adjustment phase. High inventories helped absorb the initial supply crisis, but the real challenge now is keeping the market balanced as inventories dwindle.
U.S. Vice President JD Vance told reporters on Thursday that Washington does not plan to negotiate with Iran unless Tehran ceases its attacks on commercial ships in the Strait of Hormuz.
Russia, which limits the rise in oil prices, said that a path to an agreement to end the war in Ukraine is still open, and that both the U.S. and China are prepared to support a peace deal.
Iran has expanded its list of non-compliant vessels attempting to pass through the Strait of Hormuz, subject to fines, seizure, or detention.
Iraqi vessels are among the few ships Tehran allows to pass through the Strait. Iraq's oil exports in August rose to approximately 2.34 million barrels per day from around 1.35 million barrels per day in July.
High discounts and Iranian approvals for Iraqi tankers are encouraging buyers, leading to expectations of increased exports in September.
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