Brent nears $96, set for ~9% weekly rise on Middle East tensions

Brent crude climbed toward $96 per barrel on Friday and was on track for a gain of around 9% this week, underpinned by renewed hostilities in the Middle East and growing uncertainty surrounding shipping through the Strait of Hormuz.

The US carried out fresh strikes against Iran this week following roughly a month of relative calm, prompting Tehran to retaliate by targeting American bases in the region and vessels passing through Hormuz.

Six commodity vessels transited the strait on Wednesday, down from 11 on Tuesday and compared with a 10-day average of nearly 13.

Damage to refineries in the Middle East and Russia, coupled with limited capacity elsewhere to compensate for supply disruptions, is also expected to keep global fuel prices elevated into next year.

Meanwhile, US diesel prices reached their highest level since mid-2022 this week, while inventories in Europe remain well below seasonal norms.