Oil Prices Edge Up as Market Closely Monitors US-Iran Situation

Global crude oil prices closed the end of the week with slight gains. The increase indicates the market is still moving cautiously after oil prices had fallen sharply the previous week. Citing Refinitiv data, the benchmark Brent crude oil price in trading on Friday (3/7/2026) closed up 0.45% at US$72.12 per barrel. Meanwhile, the West Texas Intermediate (WTI) crude oil benchmark price also rose 0.13% to US$68.78 per barrel. On a weekly basis, the price of Brent crude was recorded as strengthening 0.45%. Similarly, the price of WTI oil also edged up 0.13%. This increase is indeed not large. However, the movement occurred after world oil prices had experienced a sharp decline the previous week. Last week, world crude oil prices slumped as the market began to assess that supply disruptions from the Middle East would not be as severe as initially feared. The return of tanker traffic through the Strait of Hormuz also helped ease concerns over global oil supply. Even so, the oil market has not completely escaped risk. The slight rebound in oil prices at the end of this week indicates that investors are still monitoring security developments in the Middle East region, especially crucial shipping lanes like the Strait of Hormuz. The Strait of Hormuz is one of the most important chokepoints in the global oil trade. The waterway is the main exit point for oil supplies from the Gulf region. Therefore, any security disruption around the area can immediately trigger concerns over global oil distribution. In recent weeks, market concerns had eased after tanker traffic began to improve. This caused oil prices to fall from previous high levels. On the supply side, Kuwait’s oil production surged to 1.65 million barrels per day in June, from around 580,000 barrels per day in May. This increase came after Kuwait boosted exports following a temporary peace deal between the United States and Iran. At the same time, at least five supertankers carrying around 10 million barrels of Saudi Arabian oil have exited the Strait of Hormuz. This move signals that the flow of oil distribution from the Gulf region is starting to move more smoothly. Saudi Aramco also shifted part of its sales scheme to spot pricing to accelerate oil distribution to Asian markets. This condition reinforces the view that oil supply to the global market is starting to improve after being overshadowed by the risk of disruption from the Middle East region. However, conditions have not yet fully returned to normal. Shipping activity is indeed starting to recover, but the market remains cautious because the geopolitical situation around the Middle East is still difficult to predict. The rise in oil prices at the end of this week also shows that the market is in a phase of seeking new direction. On one hand, the risk of supply disruption is starting to decrease, so the pressure on oil prices is not as great as before. On the other hand, any new news from the conflict region could still push oil prices back up. Moreover, the oil market is very sensitive to supply issues, especially when it involves the world’s main energy trade routes. Oil prices in the range of US$60 to US$70 per barrel also remain a major concern for the global economy. This is because crude oil is one of the main commodities that directly affects energy prices, logistics costs, inflation, and people’s purchasing power. For many countries, lower oil prices compared to the period when they were around US$100 per barrel is good news. Inflationary pressure from the energy side can be more controlled, so the burden on society and the business world is not as heavy as when oil prices surged sharply. However, the slight increase this week serves as a reminder that oil prices are not yet fully stable. As long as geopolitical risks still loom and global supply routes are not completely normal, oil price movements have the potential to remain volatile. Going forward, market participants will continue to monitor developments in the Middle East, tanker traffic in the Strait of Hormuz, and signals of global energy demand. If oil shipping traffic continues to improve and there are no major new disruptions, oil prices are likely to remain subdued. However, if a new security incident emerges or supply concerns rise again, oil prices could receive another upward push.