Crude oil traded above $97 per barrel on Friday and was on track to gain more than 6% for the week, driven by escalating supply concerns in the Middle East. The US Central Command confirmed that a Singapore-flagged container ship that sank in the Strait of Hormuz earlier this week was struck by an Iranian projectile, adding uncertainty over the restoration of physical oil flows and pushing tanker freight rates to record highs. Rising tensions between Saudi Arabia and Iran-backed Houthi forces in Yemen further amplified supply risks.
At the same time, the IEA agreed to move ahead with the release of the remaining 100 million barrels of oil from a coordinated stockpile draw initiated in March, following lobbying by US officials. In parallel, EIA data showed that US crude inventories fell by 8.6 million barrels last week, the largest weekly decline since February. WTI was also set to outperform Brent over the week, supported by relatively lower shipping costs for US crude, which bolstered demand for American barrels.
