Oil prices erased early losses to trade flat in Asian trading on Friday, remaining on track for a sharp weekly surge as escalating conflict in the Middle East raised concerns over global supply disruptions.
As of 01:49 ET (06:49 GMT), Brent Oil Futures expiring in May edged down 0.2% to $85.25 per barrel, while West Texas Intermediate (WTI) crude futures ticked 0.3% lower to $80.75 per barrel.
Brent oil jumped nearly 5% in the previous session to its highest since July 2024, while WTI oil surged over 8%.
Both contracts were on track to advance more than 18% this week, if gains hold.
Middle East conflict shows few signs of easing
Traders locked in profits following a steep rally earlier in the week, but prices were supported amid intensifying geopolitical tensions and fears over the security of key shipping routes.
The conflict in the Middle East entered its seventh day on Friday, with fighting between the U.S., Israel, and Iran continuing to escalate. Missile strikes, retaliatory attacks, and disruptions to energy infrastructure across the region have kept global energy markets on edge.
U.S. President Donald Trump said he wanted a role in determining Iran’s next leader once the conflict ends.
Oil prices have surged sharply this week. Concerns have focused particularly on the Strait of Hormuz, a narrow waterway between Iran and Oman that serves as the world’s most important oil transit route.
Roughly 20% of the world’s oil supply passes through the Strait of Hormuz each day, making it a critical chokepoint for global energy trade. Any disruption to shipments through the strait could significantly tighten global supplies and push prices sharply higher.
"The market remains well supported with few signs of de-escalation in the Middle East and a resumption of energy flows in the region," ING analysts said in a note.
"Clearly, with every day that goes by without flows resuming, the oil market will reprice the amount of supply lost, leaving room for prices to move higher," they added.
US allows India to buy Russia oil
In a move to ease some supply concerns, the U.S. announced it would allow the sale of Russian oil to India for a period of 30 days.
"While this might help put some immediate downward pressure on the market, it is not a game-changer. The only way for prices to come down on a sustained basis is a resumption of oil flows through the Strait of Hormuz," ING analysts wrote.
Analysts say the surge in oil prices could fuel inflation pressures globally, especially if the conflict disrupts supplies for an extended period. Higher energy costs could also complicate the outlook for central banks, including the U.S. Federal Reserve.
Source: Investing