Oil prices ended higher on Friday, capping their strongest monthly performance since March as continued disruptions to tanker traffic through the Strait of Hormuz reinforced concerns over global crude supplies. Markets remained focused on shipping activity rather than military developments, with limited vessel movements through key Middle Eastern export routes keeping a significant geopolitical risk premium embedded in oil prices.
Brent crude settled at $90.12 per barrel, up 1.2%, while West Texas Intermediate (WTI) gained 1.3% to close at $84.67 per barrel. For July, Brent advanced 24% and WTI rose 21%, reflecting the sustained impact of supply disruptions stemming from the conflict in the Middle East.
Traffic through the Strait of Hormuz remained well below normal levels after reports that Iranian forces stopped several tankers and forced others to change course, while threats to shipping through the Bab el-Mandeb Strait continued to jeopardize an important alternative export route. Although discussions between Iran and Oman over the future management of the Strait of Hormuz remain ongoing, no agreement has yet been reached to restore normal commercial shipping.
Additional support came from tightening U.S. supply fundamentals, with commercial crude inventories falling to their lowest level since 2018 while exports reached another record high. At the same time, higher energy prices began weighing on domestic demand, and U.S. drilling activity continued to edge higher, suggesting producers are responding to stronger prices. Despite these offsets, continued geopolitical uncertainty and constrained global supply are expected to remain the dominant drivers of oil markets in the near term.