Key Points
- Brent crude gains around 0.5 per cent in early Asian trading to $115.44 a barrel.
- US West Texas Intermediate rises 0.8 per cent to $102.79.
- Thursday’s losses reflect hopes of renewed US-Iran negotiations, but regional supply risks remain elevated.
ISLAMABAD: Oil prices rebounded in early Asian trading on Friday as concerns about a possible resumption of US military attack against Iran and threats to Middle Eastern energy infrastructure outweighed mediators’ hopes.
Brent crude futures, the international benchmark, rose around 0.5 per cent to $115.44 a barrel. Likewise, US West Texas Intermediate (WTI) crude gained 0.8 per cent to $102.79, according to early trading data.
The price recovery followed losses in the previous session, when Brent settled at $114.88 and WTI at $102 a barrel.
The latest gains reflect the market’s continued sensitivity to developments surrounding the Iran war, now entering its eighth month, and uncertainty over the security of oil shipments through the Strait of Hormuz.
Oil prices respond to renewed military concerns
Investors remain concerned that Washington could resume military strikes against Iran after the US midterm elections next week.
Reports that a senior US military commander briefed President Donald Trump on possible military options have added to uncertainty, even as diplomatic contacts continue.
The Wall Street Journal reported that traders were balancing renewed efforts to reopen the Strait of Hormuz against the possibility of another escalation. Market analysts said these competing outlooks kept crude prices within a volatile trading range.
US Vice President JD Vance has reportedly sent a personal message to Iranian security official Mohsen Rezaei to revive negotiations.
The diplomatic initiative has opened a possible channel for discussions, although Tehran has yet to signal acceptance of Washington’s terms.
The Guardian reported that the discussions could involve Iran’s nuclear programme, sanctions relief and reopening the Strait of Hormuz.
However, substantial differences remain over the conditions for an agreement and the guarantees.
Oil supply risks extend beyond Hormuz
Security concerns have also intensified in the Middle East, a major global oil producer and exporter.
Fresh attempted attacks by Yemen’s Houthis supported a price increase on Friday as they deepened the supply concerns.
The developments have raised concerns about the vulnerability of energy infrastructure and alternative export routes at a time when the Strait of Hormuz remains a critical point of uncertainty for international oil trade.
The Associated Press also reported that Iran’s Revolutionary Guards said three tankers had struck sea mines and caught fire while attempting to use an unauthorised route near the strait. The claim could not be independently confirmed.
These claims, though not independently verified, dampen market sentiment; incidents underline the risks facing shipping companies and energy traders even when crude production and exports show signs of recovery.
Oil market faces tight supply and rising costs
The International Energy Agency‘s October oil market report explained the persistently elevated prices.
Although global oil supply rose to 102.3 million barrels per day in September, the agency warned that renewed attacks in the Gulf were threatening the recovery.
READ ALSO: Oil Prices Fall on US-Iran Peace Hopes
Global observed oil inventories fell by 10 million barrels during the month, leaving stocks 509 million barrels below their level at the end of February.
The agency also highlighted continuing pressure on refined products, particularly diesel.
Middle Eastern refined-product exports remained substantially below pre-war levels, while higher shipping and crude costs continued to squeeze refiners.
Thursday’s price decline demonstrated that diplomatic progress could quickly reduce some of the geopolitical premium built into crude.
However, the latest rebound suggests traders remain unwilling to discount the possibility of renewed military confrontation.
For oil-importing economies, including Pakistan, sustained prices above $100 a barrel threaten to increase import bills, fuel costs and inflationary pressures.
