DTN Oil Update
Oil Up for 4th Week, Brent above $100 on Hormuz Crisis
SECAUCUS, N.J. (DTN) -- Crude prices reversed early losses to settle up for a fourth straight week Friday with Brent returning to above $100 a barrel (bbl) as traders remained focused on the closure of the Strait of Hormuz. The White House, meanwhile, raced for solutions to the crisis revolving around the world's busiest shipping lane for petroleum.
U.S. President Donald Trump said Friday he was considering suspending the Jones Act to allow non-American tankers to transport energy and agricultural products between local ports amid a squeeze in vessel availability caused by the U.S.-Israel war on Iran. The effective blockade of Hormuz by Iran sent maritime charter rates soaring and idled hundreds of vessels -- including U.S. registered ones -- that has left huge gaps in the global energy supply chain.
U.S. Treasury Secretary Scott Bessent announced on Thursday the temporary waiver of sanctions on Russian oil and petroleum products for a period of 30 days to ease the energy shortage for global buyers impacted by the war. Russian presidential envoy Kirill Dmitriev said the move would free up for buyers an estimated 100 million bbl of Russian oil -- roughly a day's worth of global supply -- now trapped at sea by sanctions.
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Trump also called on oil tanker operators Friday to display more courage in carrying on with business on the strait, which in normal times provides passage to some 21 million barrels per day (bpd) of petroleum liquids. The U.S. navy reiterated its pledge to shield vessels on the waterway.
However, the measures, calls and assurances failed to reassure shippers after repeated attacks by Iran on the waterway in recent days that have caused fires on vessels, fuel spills in the sea and closure of several Persian Gulf ports and facilities that load oil. While Iran itself said it had allowed an Indian tanker on Friday to pass the strait, concerns remained.
"The world's oil and gas markets are on a knife's edge, waiting on the fate of the Strait of Hormuz -- once again a centerpiece in Iran's high-stakes game of energy brinksmanship," Phil Flynn, energy analyst for Chicago's Price Futures Group.
On Thursday, Turkey intercepted another Iranian missile as its Port of Sohar, a major hub for petrochemicals and liquid logistics in the Middle East.
"Iran knows it cannot defeat the U.S. symmetrically; instead, their goal is to trigger a global recession by weaponizing the oil supply chain," said Phil Davis, founder of PSW Investments in Boynton Beach, Florida. U.S. fatalities from the conflict have risen to 11, according to media reports.
NYMEX WTI crude futures for April delivery closed up $2.98, or 3%, at $98.71 bbl.
ICE Brent crude for May delivery settled up $2.68, or 2.7%, at $103.14 bbl.
For the week, WTI rose 7% and Brent 10%, extending advances for a fourth straight week.
Downstream, NYMEX ULSD futures for April delivery were up $0.0764 to $3.9753 gallon. NYMEX RBOB futures for April climbed by $0.0566 to $3.0212 gallon. The U.S. Dollar Index, meanwhile, strengthened by 0.376 points to 100.13, adding to the weight on commodity markets.
On the data front, the University of Michigan reported that U.S consumer sentiment has fallen to a 2026 low on concerns over the impact of the Iran war.
News that U.S. GDP growth had halved to 0.7% during the fourth quarter from 1.4% in the third quarter had little impact energy markets.