Oil prices stay above $100 after Hormuz clashes keep fuel cost fears alive

Dubai: Oil prices held above $100 a barrel on Friday, even as Brent headed for a deep weekly loss, with traders weighing President Donald Trump’s claim that the Iran ceasefire remains in place against fresh military clashes in the Strait of Hormuz.

Brent crude traded at $100.27 a barrel by 2.44 pm in Singapore, up 0.2%, while West Texas Intermediate was down 0.1% at $94.70. Despite the modest moves on Friday, Brent was still on course for a weekly decline of more than 7%, after hopes of a deal to reopen the Strait of Hormuz briefly pulled prices below $100 for the first time in more than two weeks.

That fall did not last. Buyers returned around the $100 level, treating it as a key psychological marker for a market still heavily driven by war headlines, shipping disruption and the cost of fuel for consumers and businesses.

Ahmad Assiri, Research Strategist at Pepperstone, said oil remained highly exposed to each turn in the conflict.

“Oil market is unsurprisingly still highly sensitive to geopolitical headlines and Iran conflict re-escalation de-escalation ping pong that can move Brent by several dollars within a single session,” Assiri said.

The latest pressure point remains Hormuz, the waterway that carries a major share of the world’s seaborne crude and energy flows. The strait has been effectively closed since the war began at the end of February, choking crude flows and forcing wells across the region to shut in.

US Central Command said American forces struck military targets in Iran after Tehran fired on three destroyers in the Strait of Hormuz. The command said it “does not seek escalation,” while Trump later said the three warships had exited the waterway safely and were undamaged.

The president also told reporters in Washington that the ceasefire with Tehran remained in effect, despite the latest exchange. That statement helped limit a larger move in crude prices, with traders still assigning some chance to diplomacy after weeks of disruption.

The direction of crude matters beyond financial markets because it feeds into retail fuel prices, airline costs, freight charges and inflation. The conflict has already imposed a growing burden on consumers through higher gasoline and diesel prices, while shipping and logistics companies remain exposed to longer routes and higher insurance costs.

The Trump administration has been waiting for Tehran to respond to its proposal to reopen the trade route, though Iran’s leaders have yet to say whether they will accept the terms. Until that becomes clear, traders are likely to treat any fall below $100 as fragile.

Assiri said Brent’s brief dip below the threshold reflected hopes of a fast resolution, but the recovery showed buyers were not ready to abandon the conflict premium.

“Brent oil has been a driver behind a fair bit of broader market movements this week. Its price briefly dipped below the $100 mark, the first time in over two weeks on hopes of an immediate resolution,” he said.

“However, the move proved to be short lived as trading activity picked up after that with buyers going long at this important psychological level pushing price well back above $100 and steadying the broader energy market mood,” he added.

The United Arab Emirates said on Friday that air-defence systems were intercepting missiles and drones, according to a post on X. The UAE sits across the Strait of Hormuz from Iran and has been targeted several times during the conflict, including a strike earlier this week in the port city of Fujairah.

The renewed attacks have kept regional risk at the centre of energy trading, although the market reaction has been more contained than during earlier stages of the conflict.

- With inputs from Bloomberg.