Oil Prices jump 6% in five days on geopolitical risks

Oil prices recorded strong weekly gains as escalating tensions in the Middle East, renewed security concerns in the Strait of Hormuz, and continued Ukrainian strikes on Russian energy infrastructure outweighed expectations of higher OPEC+ output.

International benchmark Brent crude closed at US$76.85 per barrel, up 6.5 per cent from last Friday’s US$72.12. US benchmark West Texas Intermediate (WTI) settled at US$72.42 per barrel, rising 5.3 per cent from US$68.78 a week earlier.

Prices began the week with modest gains after OPEC+ agreed to raise production targets by 188,000 barrels per day (bpd) for August, continuing the gradual unwinding of voluntary cuts. The move initially capped upward pressure, but sentiment shifted sharply midweek.

Reports of missile attacks on commercial vessels in the Strait of Hormuz and Ukrainian drone strikes on Russian refineries revived fears of supply disruptions. Prices spiked further after Washington revoked a waiver allowing Iranian oil sales, tightening global supply expectations.

The rally accelerated when US President Donald Trump declared the ceasefire with Iran “over” following renewed US strikes, fueling fears of broader conflict in the Gulf. Brent briefly climbed above $78 per barrel before easing later in the week.

Despite retreating from highs, Brent remained elevated as fresh military exchanges between Washington and Tehran kept supply risks in focus. Continued Ukrainian attacks on Russian energy facilities also disrupted refining capacity, adding to global supply concerns.

However, gains were capped by expectations of higher OPEC+ production and worries that rising energy prices could fuel inflation, keeping interest rates higher for longer and weighing on demand outlook.