FX.co ★ Brent Rises on Middle East Risks

Brent crude edged back toward $88 per barrel on Friday, erasing the previous session’s losses as negotiations to end the conflict in the Middle East and reopen the Strait of Hormuz remained stalled, heightening concerns over a potential escalation. Shipping through the strategic chokepoint continues to face persistent security threats. Nonetheless, crude exports from the Persian Gulf are ongoing, with some tankers reportedly transiting the area with their transponders turned off. The US estimates that as much as 9 million barrels of oil per day are currently moving through the strait.

On the demand side, the IEA cut its global oil demand forecast this week, cautioning that a prolonged conflict and elevated prices are increasingly weighing on consumption. At the same time, the agency projects global oil supply will fall by 4.3 million barrels per day, or roughly 4%, this year, as renewed hostilities in the Middle East risk driving the global oil market further into deficit.