Crude Oil Heading for Weekly Gain Above 6% Amid Middle East Tension

Crude oil futures held near $98 a barrel on Friday and are poised to close more than 6% higher for the week. The market advance comes despite daily trading showing Crude Oil Futures (NYMEX:CL1!) down 1.55% at $96.45. Rising geopolitical friction in the Middle East and physical supply bottlenecks have driven the weekly increase, overshooting government attempts to cap prices through reserve drawdowns.

Supply security through the Persian Gulf has re-emerged as a core market issue following confirmation from US Central Command that a container vessel, the GFS Pride, sank after being struck by an Iranian projectile in the Strait of Hormuz. Although more than 40 vessels successfully navigated the waterway over a 24-hour window, the incident highlighted persistent operational hazards along key trade lanes. To curb price escalation, International Energy Agency members agreed under US pressure to distribute the remaining 100 million barrels from an emergency stock release initiated in March.

Traders are closely monitoring diplomatic efforts and potential policy adjustments from Washington, where authorities are reportedly weighing whether to ease sanctions on selected tankers carrying oil from Iran, Russia, and Venezuela. The market will also track whether shipping traffic through the Strait of Hormuz remains steady and if additional emergency inventory distribution can offset physical delivery risks.