Oil rallies for the week as US-Iran fighting resumes; diesel hits record high

Oil prices experienced a rally on Friday, with the potential to increase by more than 6% for the week following the resumption of military exchanges between the United States and Iran. Brent crude futures dropped by 23 cents, or 0.24%, to $95.29 a barrel, while West Texas Intermediate crude futures declined by 54 cents, or 0.59%, to $90.76.

Brent crude futures were up 6.1% for the week, and U.S. West Texas Intermediate crude futures gained 8.3%. The surge in oil prices, coupled with a significant rise in diesel prices, has led to higher inflation and government borrowing costs worldwide, raising concerns about a potential global economic downturn. Analysts believe the oil market's current rally is driven by mood and fear, as renewed U.S.-Iran hostilities and disruptions in Ukrainian attacks on Russian refineries have caused supply disruptions.

U.S. government officials have reported that Middle Eastern oil flows have returned to near normal levels, but analysts and tanker trackers claim that flows remain severely disrupted. Oil's current rally is primarily attributed to a risk premium appearing in market prices due to the conflict's gridlock and recurring hostilities.