Low traffic through the Strait of Hormuz keeps the supply-risk premium elevated.
Brent is trading around $95.5 per barrel on Friday. Prices have gained roughly 7.6% since the start of the week.
3 Takeaways
- Brent is heading for its strongest weekly gain since mid-July.
- Only four commercial vessels passed through the Strait of Hormuz on Thursday, compared with an average of around 15 over the previous ten days.
- Physical supply has not stopped, but available spare capacity is becoming increasingly important.
Market Overview
Brent has consolidated near six-week highs after rallying from below $90 per barrel. The main driver remains the renewed escalation between the US and Iran, together with growing risks around regional oil infrastructure. Ukrainian attacks on Russian refineries are adding another layer of uncertainty. As a result, the market is no longer looking only at how much oil is available, but also at whether that supply can reach buyers without disruption.
Supply and Demand
The physical market remains tight. According to Kpler data, only four tracked commercial vessels passed through the Strait of Hormuz on Thursday, compared with an average of around 15 over the previous ten days. Observed crude exports through the strait have fluctuated around 4–6 million barrels per day since the conflict intensified. Iraq, meanwhile, increased exports to around 2.34 million barrels per day in August, partially offsetting the loss of supply elsewhere.
Macro Factors
High oil prices are once again becoming part of the global inflation story. Brent near $95 complicates the outlook for central banks and increases the risk that interest rates will remain elevated for longer. At the same time, Christopher Waller’s more dovish comments have reduced concerns that the Federal Reserve will need to react aggressively to the energy shock. Today’s US jobs report will also matter for oil: a resilient economy would support demand expectations but could simultaneously push Treasury yields and the US dollar higher.
Technical Picture
After a sharp weekly rally, Brent has moved into consolidation around $95–96 per barrel. The nearest support zone is located at $94–95. As long as prices remain above this area, another test of $98 remains possible, followed by the psychological $100 level. A move back below $94 would be the first sign that some of the geopolitical premium is starting to unwind.
FAQ
Why has Brent risen so sharply this week?
The main drivers are the renewed escalation between the US and Iran and the sharp decline in observed vessel traffic through the Strait of Hormuz.
Can Brent move above $100 per barrel?
Yes. A sustained move above $100 would become more likely if physical export flows decline further or if new attacks target tankers or regional oil infrastructure.
What could push Brent lower quickly?
A de-escalation in the US-Iran conflict and a sustained recovery in shipping traffic through the Strait of Hormuz.