Oil Up Over 3% on Fears of New US-Iran Combat

Oil prices gained more than 3 percent on Friday after comments by US President Donald Trump and Iran’s foreign minister further dented hopes of a deal to end ship attacks and seizures around the Strait of Hormuz. The tone between the US and Iran has once again become significantly more confrontational.

Brent crude futures settled at $109.26, while US West Texas Intermediate crude (WTI) finished at $105.42. For the week, Brent rose 7.9 percent, while WTI increased by 10.5 percent.

The world has consumed its oil safety net at a historic rate. While strategic releases and demand reduction have prevented immediate chaos, the margin for error is shrinking rapidly, analysts said.

A prolonged closure of the Strait

of Hormuz points to tighter physical markets, potential refined product shortages, and upward pressure on prices.

Asian LNG prices rise on Iran worries, higher summer demand forecast

Asia spot LNG prices rose last week amid concerns over the renewed US-Iran conflict after US President Trump said his patience with Tehran was running out.

The average LNG price for June delivery into northeast Asia was $17.80 per million British thermal units, up from $16.90 per mmBtu the previous week.

Asia-Pacific pricing has pulled back from recent highs, indicating some demand destruction. However, as Qatari volumes remain shut in and no diplomatic resolution is in sight, analysts said there is likely to be further upside risk in the short to medium term.

In Europe, the Dutch TTF gas price settled at $17.23 per mmBtu, posting a weekly gain of 13.7 percent. Market participants remained focused on geopolitical developments. Persistent risk premia, alongside the potential for supply disruptions, continued to underpin market sentiment.

— By The Al-Attiyah Foundation