Oil prices set to end week above $100 for first time in nearly 4 months

Oil prices are poised to conclude the week above $100 per barrel for the first time in nearly four months, according to Reuters. Despite a slight decline in oil prices on Friday, both major benchmarks are expected to surpass the $100 threshold as attacks along vital shipping routes in the Middle East heighten concerns of a prolonged supply disruption. Brent crude futures had an early drop of $1.64, or 1.5%, to $105.99 a barrel, while U.S. West Texas Intermediate crude slipped by $1.28, or 1.3%, to $101.20 a barrel.

The benchmarks are still trading more than 10% higher on a weekly basis, marking the steepest gain since the week ended on July 17. A rise of over 6% was observed in both benchmarks on Thursday. Iran-aligned Houthis took control of Yemen's port of Mocha on Thursday, presenting an additional threat to Red Sea traffic, while Gulf traffic remains restricted due to tanker attacks in the region.

Analysts warn that oil supply disruptions resulting from the U.S.-Israeli war on Iran, along with Ukrainian attacks on Russia's refineries, have pushed the U.S. national average diesel price to exceed $6 per gallon for the first time. U.S. President Donald Trump has not indicated any intention to ease attacks on Iran, even threatening to hit Iran's Pickaxe Mountain near its severely damaged Natanz uranium enrichment facility.

Iran retaliated by attacking 10 ships near the Strait of Hormuz, following the U.S. attack on five Iranian oil tankers.

The outcome of this conflict hangs in the balance, with analysts predicting that WTI crude could retest the $119.48 high from early March. The durability of the rally will depend on China's continued crude imports, as OPEC lowered its forecast for global oil demand growth in 2026 to 380,000 barrels per day. The next major development in the oil market will hinge primarily on whether physical flows improve or worsen further.