Oil prices rose on Friday and posted substantial weekly gains as renewed military exchanges between the United States and Iran heightened concerns over prolonged disruptions to Middle Eastern energy supplies. Brent crude gained 76 cents, or 0.8%, to settle at $92.68 per barrel, while WTI rose 18 cents, or 0.2%, to $91.48. For the week, Brent increased 7.6% and WTI gained nearly 10%.

The rally was driven by continued uncertainty surrounding the conflict and severely impaired shipping through the Strait of Hormuz. Just four commodity vessels transited the waterway on Thursday, well below the recent 10-day average of approximately 15, underscoring the continued disruption to a key global energy supply route.

Fuel markets remain particularly tight, with U.S. diesel prices reaching record highs. Supply disruptions affecting Middle Eastern production and Russian refining capacity, combined with declining distillate inventories, have pushed average U.S. diesel prices to approximately $5.85 per gallon. Higher diesel costs are also increasing inflationary pressures across transportation, agriculture, and other sectors.

Analysts raised their near-term oil price outlooks as the reopening of Hormuz continues to take longer than expected. Citi increased its third-quarter Brent forecast to $86 per barrel, while ANZ raised its short-term forecast to $95, citing additional upside risk if the conflict intensifies.

Meanwhile, Iraq increased August oil exports to approximately 2.34 million barrels per day from 1.35 million bpd in July, providing some additional supply. However, analysts noted that this week’s price rally appears driven primarily by geopolitical uncertainty and fears of future disruptions rather than evidence of a significant new decline in physical Middle Eastern exports.

With military tensions continuing, Hormuz traffic remaining far below normal levels, and refined fuel supplies tightening, oil markets ended the week carrying a significantly elevated geopolitical risk