(RTTNews) – Rebounding from two consecutive sessions of losses, crude oil prices have catapulted on Friday as U.S.-Iran escalation grows wider with the U.S. targeting Iran’s civil infrastructures. However, expectations for a resolution through peace talks after both nations expressed readiness for negotiations capped the gains.
WTI Crude Oil for August month delivery was last seen trading up by $3.65 (or 4.62%) at $82.60 per barrel.
Supply concerns continued to drive up crude oil prices today as the Strait of Hormuz remains shut, blocking all vessel movements and thereby crippling oil and energy trade across the Arabian Gulf.
On June 17, the U.S. and Iran consented to halt their attacks and charter a framework to explore peaceful ways for ending their hostilities which led to a war on February 28.
The Memorandum of Understanding led to Iran reopening the Strait of Hormuz. On its part, the U.S. lifted its naval blockade on Iranian ports as well as the embargo on its oil exports.
Soon after the recent standoff, Iran announced the closure of the strait while the U.S. re-imposed the sanctions on Iranian oil exports.
U.S. Central Command announced that U.S. forces are ready to safely escort vessels through the strait. However, amid intense attacks over the past week, shipping traffic has been significantly reduced across the Strait of Hormuz.
Seafarers refrained from navigating near the region fearing risks linked to safety of their lives and vessels against the backdrop of threats due to sea mines, missile and drone attacks as well as the uncertainty surrounding Iran’s tolls.
For the sixth consecutive day today, the U.S. continued its strikes on Iran, targeting civilian and energy infrastructures including an airport, a railway station, and two bridges. The Iranian energy ministry asked its citizens to minimize their electricity usage after hits on energy facilities.
In retaliation, Iran conducted widespread strikes on Qatar, Oman, Jordan, Bahrain, and Kuwait. In Kuwait, Iranian attacks damaged a power plant and a desalination plant.
In his address at the White House, U.S. President Donald Trump stated that the U.S. is winning big in Iran and remarked that the results will be seen shortly.
Keeping alive the expectations of a peaceful solution to the crisis even as the conflict intensifies, the White House said that Trump was open to diplomacy.
White House Spokesperson Karoline Leavitt acknowledged that the U.S. is in talks with Iran.
Similarly, yesterday Iran’s Parliamentary Speaker Mohammad Bagher Ghalibaf stated that doors are open for talks and asserted that negotiations at this stage does not mean capitulation.
Experts are of the view that the U.S. is adopting a hybrid approach with measured military attacks on Iran while mobilizing talks with the nation in parallel to pressure Iran to accept a deal.
Iran already threatened to interfere with the Red Sea shipping route (the Bab al-Mandeb Strait) with the aid of Iran-backed Houthi militia if the U.S. deepened its attacks on Iran.
The supply-related concerns and the prevailing uncertainty over U.S.-Iran conflict offered support to crude oil prices by compounding its geopolitical risk premium.
According to a recent report by the International Energy Agency, the global demand for crude oil is estimated to fall by nearly 1 million barrels per day, year on year in 2026.
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