Source Credit : Portfolio Prints
Oil prices surged to their highest level in more than three years on Friday, as U.S. President Donald Trump’s shift toward negotiations with Iran failed to calm market fears over a major supply disruption in the Middle East.
U.S. crude rose 5.46% to settle at $99.64 per barrel, while international benchmark Brent crude gained 4.22% to close at $112.57. Both benchmarks reached their highest levels since July 2022, when the Russian invasion of Ukraine sent shockwaves through global energy markets.
During Friday’s session, U.S. crude briefly crossed the $100 mark, hitting a high of $100.04 before easing slightly. For the week, U.S. crude posted a modest gain of around 1%, while Brent finished largely unchanged.
Markets remained on edge despite Trump granting Iran a 10-day window to reopen the strategically vital Strait of Hormuz. In a social media post, Trump said negotiations were “going very well,” dismissing contrary reports as inaccurate. He also announced a pause on U.S. attacks targeting Iran’s energy infrastructure until April 6, though Tehran has yet to respond publicly.
Tensions in the region were underscored by reports that vessels operated by China Ocean Shipping Company attempted to transit the Strait but were forced to turn back, according to tracking firm MarineTraffic. The incident marked the first attempt by a major container carrier to cross the route since the conflict began, highlighting the growing risks to global shipping.
The Strait of Hormuz, a critical artery for global energy supplies, remains highly unstable. Although Iran has reportedly allowed some oil tankers to pass—described by Trump as a “gesture”—the broader outlook for supply remains uncertain.
Investors are closely watching developments in the waterway, as tensions between Washington and Tehran continue to inject volatility into oil markets. While limited flows suggest some short-term relief, analysts warn that the underlying risks remain elevated.
“The market hasn’t underreacted—it has absorbed the disruption,” said Paola Rodriguez-Masiu, chief oil analyst at Rystad Energy. She noted that recent price stability was supported by surplus supply, floating storage, and policy buffers—factors that are now diminishing.
According to Rystad, the global oil system has shifted from “buffered to fragile” after weeks of supply losses and declining inventories, leaving little capacity to absorb further shocks.
An estimated 17.8 million barrels per day of oil and fuel flows through the Strait of Hormuz have been disrupted, with total losses approaching 500 million barrels—underscoring the scale of the crisis and the risks facing global energy markets.
