Oil set for second weekly rise as unsettled US-Iran war crimps supply

Oil prices are set to rise for a second week as the ongoing US-Iran conflict continues to impact supply from key Middle Eastern producers. Brent crude futures increased by 4 cents to $93.82 a barrel, while US West Texas Intermediate crude futures fell by 6 cents to $86.78 a barrel. Over the past five days, Brent gained over 7% and WTI climbed more than 8%, reaching their highest levels since July 24.

The supply disruptions are largely due to the inconclusive nature of the US-Israeli war on Iran, which has led to continued curtailment of production from major oil exporters including Saudi Arabia, Iraq, the UAE, and Kuwait. The peace deal between these countries expired this week, with no attempts to restart talks. US President Donald Trump has threatened economic retaliation against nations supporting Iran, warning of consequences for any country providing support to Tehran.

The UAE has suspended all financial and economic transactions with Iran until further notice, reflecting the strained relations between the major Gulf Arab oil producer and Iran. The conflict in Iran, which began on February 28 with US and Israeli strikes on Iran, has resulted in thousands of deaths. Since then, Iran has blocked the Strait of Hormuz and attacked energy facilities across the Middle East, disrupting global oil and gas flows.

As of Wednesday, only nine vessels were transiting the Strait, far below pre-war levels. Prior to the Iran war, shipments equal to about one-fifth of global consumption passed through the waterway.