Oil posted its biggest monthly gain since March on Friday as traders grappled with simmering global conflicts and threats to supply from the Persian Gulf to the Black Sea. Brent’s most active contract settled up 1.2% near $88 a barrel, while West Texas Intermediate rose 1% to settle below $85, according to Reuters data.
The rally capped a volatile month in which crude swung on every twist of the US-Iran war, from pauses in hostilities and talk of negotiations to renewed missile strikes and shipping attacks. US President Donald Trump said he is losing confidence in Iranian negotiators, the latest sign that armed hostilities could drag on and further disrupt energy shipments from the Middle East.
A series of attacks on ships loading oil at or near the Caspian Pipeline Consortium terminal in Russia’s Black Sea has added to supply concerns from a second front, tightening the market’s risk premium even as global inventories remain under scrutiny.
In the Gulf, Iran’s Revolutionary Guards have said they struck and stopped two tankers in the Strait of Hormuz, and on Saturday a tanker was hit by an unknown projectile off Oman, damaging its engine room and leaving the vessel not under command, the UK Maritime Trade Operations said. Iran has also signaled it will further tighten the waterway if a US naval blockade continues.
The Strait of Hormuz carries roughly a fifth of global oil consumption, and analysts warn that any sustained closure would test the world’s ability to replace the lost barrels. Traffic through the strait has already dropped sharply since the conflict escalated, with data firm Kpler reporting thin flows even as some shuttle trade begins to resume.
On the corporate front, ExxonMobil and Chevron reported blowout quarterly profits that they plowed back into debt reduction rather than huge buyback increases, a sign of Big Oil’s caution about how long war-driven price rallies will last. On Thursday, rival Shell reported its second-highest quarterly profit on record, as the Middle East conflict fueled a boom in trading and refining.
Oil prices closed more than $1 per barrel higher on Friday, logging their strongest month since March. Analysts said the direction of prices in August will hinge on whether US and Israeli strikes on Iranian energy infrastructure materialize, whether Tehran responds in the Strait of Hormuz, and whether diplomatic efforts to end the war regain traction.
Sources: Rigzone, The Daily Star, Middle East Eye