Brent climbs $1 on uncertainty over end to Iran war

Brent crude oil prices surged over $1 a barrel on Friday due to uncertainty surrounding negotiations aimed at resolving control of and reopening the Strait of Hormuz, a critical global shipping route. The futures for Brent crude settled at $83.55 per barrel, while US West Texas Intermediate (WTI) crude finished at $78.18 per barrel.

Over the week, Brent crude fell by 7.3 percent, and WTI declined by 7.7 percent. Iran and Oman reportedly reached an agreement on the path ships would follow through the strait, which separates the two nations; however, it remains uncertain whether the US will endorse their terms. Iran reportedly aims to charge between 5% and 7% of the price from ships utilizing the strait, whereas Oman is contemplating a fee of around 3%, and Washington is not seeking any fees.

Meanwhile, Asia spot liquefied natural gas (LNG) prices experienced a decline this week but stabilized near a four-month high, as the ongoing U.S.-Iran conflict kept supply and shipping risks at the forefront, while South Asian buying interest helped offset subdued demand from Japan and China. The average LNG price for September delivery in northeast Asia was $20.40 per million British thermal units, a drop from $21.35 per mmBtu the previous week.

The flexibility in the spot market is attributed to US contract volumes that Chinese and Japanese buyers are reselling instead of increasing production. In Europe, the Dutch TTF gas price settled at $18.70 per mmBtu, marking a weekly decline of 5.1 percent. Additionally, prices in northwest Europe for LNG softened as geopolitical risk premiums diminished, following reports that US President Trump proposed talks with Iran.