Oil prices edged higher after fresh attacks on Saudi energy infrastructure and ongoing concerns about the Strait of Hormuz closing, keeping markets on edge even as a fragile ceasefire between the U.S. and Iran held. Traders priced in supply risks as energy assets in the Gulf faced ongoing disruption and geopolitical headlines remained firmly in focus.
Brent crude futures climbed to about $96.75 a barrel, up 83 cents or 0.87%, while West Texas Intermediate rose to $98.91 a barrel, up $1.04 or 1.06%. The market has been reacting to ongoing disruption at sea routes and the broader risk premium that comes with potential interruptions to global flows amid the Middle East tensions. Ship traffic through the Strait of Hormuz remained severely disrupted, operating at less than 10% of normal levels on Thursday, underscoring persistent bottlenecks even as talks of de-escalation circulate.
The tension has also been reflected on the ground, with roughly 50 assets across the Gulf hit by drone and missile strikes in recent weeks and about 2.4 million barrels per day of refining capacity knocked offline, according to JPMorgan. That kind of damage to refining capacity and infrastructure tends to support prices by keeping supply fears front and center for traders.
In political developments, comments from U.S. President Donald Trump added another layer of uncertainty. In a post on Truth Social, he warned that American military assets would remain stationed in and around Iran, along with additional ammunition and weaponry, if terms aren’t honoured. While he stressed that a wider conflict remains unlikely, the rhetoric reinforces the sense of risk around the market.
Analysts at Macquarie warned that even if tensions ease, prices could stay supported in the $85 to $90 range for now, with a potential drift toward $110 if flows through the Strait resume and supply concerns ease more broadly. That outlook captures the delicate balance markets are weighing: stubborn supply risks and geopolitical headlines versus signs that some elements of the frictions could abate.
As the ceasefire endures, traders will still be watching any new disruptions and the pace of normalize flows, mindful that the next move could hinge on a single flare-up or a fresh round of diplomacy. The coming weeks are likely to keep oil markets volatile as participants reassess risk, demand signals, and the timing of any actual easing of tensions.
