Middle East Tensions Drive Crude Oil Prices Higher

The week saw crude oil exhibit sharp volatility, tracing a path from a low of $67.82 to a peak of $76.08 before settling. While OPEC+ moved to return withheld barrels to the market, this bearish pressure failed to gain traction against the backdrop of heightened tensions involving Iran. Market participants have largely dismissed the impact of additional supply, prioritizing the potential for restricted transit through one of the world's most critical maritime chokepoints.

Even with a late-week pullback from highs and an unexpected build in U.S. crude inventories, the contract maintained a weekly gain of $3.38, or 4.94%. This shift in sentiment underscores a market increasingly sensitive to regional instability. With roughly one-fifth of global oil shipments passing through the Strait of Hormuz, the cost of crude is currently tethered to the evolving security landscape in the region rather than standard supply-demand fundamentals.