Oil prices ended the week sharply higher as renewed US-Iran military exchanges intensified fears of supply disruptions in the Middle East, with Brent crude
settling at $96.28 a barrel and US West Texas Intermediate (WTI) at $91.48. Brent futures gained 76 cents, or 0.8 per cent, on Friday, while WTI rose 18 cents, or 0.2 per cent. Over the week, Brent climbed 7.6 per cent and WTI gained nearly 10 per cent, marking the strongest weekly advance since the middle of July. The latest gains came after the United States and Iran resumed military exchanges, with Washington also striking three Iranian crude oil tankers following missile attacks on US Navy vessels, according to US Central Command. The escalation has added to concerns about the security of oil shipments in and around the Strait of Hormuz. The Strait of Hormuz remains the key focus for energy markets. A sharp decline in vessel traffic through the strategic waterway has raised concerns that prolonged disruption could restrict global crude supplies and push prices higher. Oil had already climbed to six-week highs earlier in the week. On September 3, Brent reached around $97.29 a barrel, while WTI rose to about $93.04, as renewed US strikes on Iran and heightened threats in the region fuelled supply concerns. Why Oil Prices Are Rising The latest rally reflects growing fears that the conflict could affect oil production, exports and shipping routes across the Gulf. Iran is a major oil producer, while the Strait of Hormuz is a crucial route for global energy shipments. Any sustained disruption could therefore have consequences far beyond the Middle East, increasing costs for refiners, transport companies and consumers. The market is also dealing with tighter US fuel supplies. US diesel prices reached a record $5.85 per gallon, according to Reuters, adding to concerns that higher energy costs could feed into inflation and weigh on economic growth. India Faces Higher Oil Import Costs The rise in global crude prices is particularly significant for India, which imports nearly 90 per cent of its crude oil requirements. India's crude basket had already climbed close to $100 a barrel earlier this week amid the renewed West Asia tensions. The increase could put further pressure on India's import bill, inflation and the current account if elevated prices persist. For now, traders are closely watching the next moves by Washington and Tehran, particularly any further attacks on oil infrastructure or shipping. A wider disruption to supplies or a prolonged crisis around the Strait of Hormuz could push Brent crude towards the psychologically important $100-a-barrel level. Conversely, any credible move towards de-escalation or renewed US-Iran negotiations could ease the supply risk premium and pull prices lower.
