Oil prices steadied on Friday but remained on track for their strongest monthly performance since March as the escalating conflict between the US and Iran heightened concerns over global crude supplies despite signs of improving shipping through the Strait of Hormuz.
Brent crude traded above $89 a barrel, while West Texas Intermediate (WTI) hovered near $84 a barrel. The global benchmark has gained more than 23% in July, capping a month marked by sharp volatility as geopolitical tensions repeatedly rattled energy markets.
Crude prices have swung wildly this week, with Brent trading in a range of nearly $11 a barrel, reflecting rapidly changing expectations around military developments and supply disruptions in the Middle East.
The latest gains came as the US and Iran exchanged fresh strikes on Thursday, extending a conflict that has increasingly drawn in regional players. While tanker traffic through the Strait of Hormuz has picked up in recent days, concerns over the security of one of the world's most important energy chokepoints remain elevated.
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Saudi Arabia is also seeking to shore up maritime security, holding discussions with representatives from 43 countries to form an alliance aimed at protecting navigation in and around the Red Sea after Iran-backed Houthi rebels imposed a blockade on the kingdom last week. Houthi leader Abdulmalik al-Houthi warned that any broader Saudi military escalation would be met with a stronger response, adding to concerns over attacks on oil infrastructure and shipping lanes.
Beyond the Middle East, traders are also monitoring disruptions in the Black Sea, where repeated tanker attacks have halted loadings at the Caspian Pipeline Consortium terminal, a key export route for Kazakhstan's crude. The attacks have added another layer of uncertainty to an already strained global supply chain.
Meanwhile, falling US crude inventories have reinforced expectations of a tightening physical market, while investors are awaiting earnings from US oil majors Chevron and ExxonMobil for clues on demand and production trends. Shell earlier this week reported its second-highest quarterly profit on record, underscoring how heightened volatility has boosted trading and refining margins.
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