Key facts
- Oil prices are set for their largest weekly gain since mid-July due to escalating US-Iran tensions.
- Brent crude futures rose 7.1% and WTI gained 9.8% for the week.
- US attacks this week targeted Iran, marking the fiercest clashes since July.
- Iran has expanded its list of non-compliant vessels attempting to transit the Strait of Hormuz.
- Iraq's oil exports increased significantly in August, aided by Iranian approvals for its tankers.
Oil prices are poised for their most significant weekly increase since mid-July, fueled by escalating tensions between the United States and Iran and heightened concerns over potential disruptions to Middle East supply. Brent crude futures saw a weekly gain of 7.1%, while U.S. West Texas Intermediate (WTI) crude futures climbed 9.8%, marking their strongest performance since the week ending July 20.
The recent surge in hostilities includes U.S. attacks that resulted in casualties, including Iranian civilians, representing the most intense clashes between the two nations since July. Israeli Defence Minister Israel Katz has reiterated warnings of potential strikes on Iran's military and civilian infrastructure, including its energy facilities. U.S. Vice President JD Vance indicated that Washington would not engage in talks with Iran unless Tehran ceases its attacks on commercial shipping in the Strait of Hormuz.
Adding to supply concerns, Iran has expanded its list of vessels deemed non-compliant and subject to penalties if they attempt to transit the Strait of Hormuz, though Iraqi ships are among the few cleared to pass. Iraq's oil exports saw a substantial increase in August, reaching approximately 2.34 million barrels per day, up from 1.35 million bpd in July, with further increases anticipated due to heavy discounts and Iranian approvals for Iraqi tankers.
However, capping the advance in oil prices, Russian President Vladimir Putin suggested that a resolution to the war in Ukraine remains possible, with both the U.S. and China reportedly open to supporting a peace settlement.