Oil Holds Near Highs as Iran Conflict Uncertainty Persists

Crude oil was little changed around $94 a barrel on Friday, as investors assessed signs that Iran may be seeking an end to the conflict with the US. Iranian President Masoud Pezeshkian said Tehran would prefer to conclude the war while it remains in a position of strength, describing the existing memorandum with Washington as a victory for Iran. The comments provided some relief after Treasury Secretary Scott Bessent said the US would impose its toughest-ever sanctions on Tehran and intensify economic pressure on the Iranian regime. Amidst the conflicting signals, oil prices rose more than 5% for the second week. Meanwhile, the US military said it had helped tankers transport more than 660 million barrels of crude through the Strait of Hormuz since early May, suggesting that substantial volumes continue to move through the critical energy corridor despite the conflict and heightened geopolitical risks.

Crude oil traded just below $87 a barrel on Friday, heading for a second consecutive weekly gain of around 5%. Prices remained supported by expectations of further US pressure on Iran, with no clear end to the conflict that has disrupted Middle Eastern energy flows. Treasury Secretary Scott Bessent said details of Washington’s new measures to isolate Iran’s economy would be announced next Monday, after President Donald Trump described the initiative as an “economic D-Day.” The measures could affect countries that continue trading with Tehran, including China, the largest buyer of Iranian crude. Beijing has rejected economic pressure and called for a diplomatic solution. Supply concerns are also being reinforced by disruptions to Russia’s energy sector, where Ukrainian attacks on refineries and ports have affected fuel production and contributed to shortages in some regions.

Crude oil traded above $86 per barrel on Friday and was on track to post a second consecutive weekly gain, rising nearly 6% so far this week. The gains came as the US-Iran conflict showed no signs of abating, with the two sides locked in a dispute over the Strait of Hormuz. The US is moving to isolate Iran’s economy in what President Donald Trump described as an "economic D-day,” with details of the initiative expected on Monday. The proposed measures are likely designed to cut Tehran off from international financial and commercial channels, including banks, businesses, shipping registries, cash transfers and smuggling networks. Washington aims to increase economic pressure on Iran and push Tehran toward negotiations over the conflict, its nuclear programme and control of Hormuz. Elsewhere, a series of Ukrainian strikes on Russian energy infrastructure has caused fuel shortages in some regions, adding further pressure to global oil markets.