NEW YORK / RankWire.AI / – Oil prices surged by more than 4% on Friday. Brent crude exceeded $88 a barrel, with both primary benchmarks reaching their highest closing levels in over a month. Brent futures increased by $3.87, or 4.59%, to finish at $88.10 per barrel. Meanwhile, U.S. West Texas Intermediate rose by $3.54, or 4.48%, to close at $82.49. Both contracts gained approximately 16% over the week, with Brent marking its third straight weekly rise and WTI its second.
The upward movement coincided with a significant drop in commercial shipping activity through the Strait of Hormuz. This vital waterway continues to serve as a key route for global oil and gas shipments. On Thursday, only three commodity vessels traversed the strait, marking the lowest daily count since May. The previous day saw eleven ships passing through, compared to an average of 125 ships daily before the current conflict. No very large crude carriers or liquefied natural gas tankers crossed for a second consecutive day.
During the week, the United States and Iran intensified attacks on infrastructure, while restrictions again curtailed Gulf shipping activity. Iraq temporarily halted oil loadings at its Basra terminal following a drone strike on a tanker, though loadings later resumed. Additionally, two large crude carriers, each capable of carrying about 2 million barrels, appeared outside Hormuz after departing from the Gulf earlier in the week. These incidents occurred as crude futures experienced their largest daily gains of the week and energy prices increased across global markets.
Traffic through Hormuz declines as crude prices rise
The International Energy Agency reported that Gulf oil exports increased by 6.5 million barrels per day in June, reaching a total of 16.1 million barrels daily. However, this remains below the pre-conflict level of 24 million barrels per day. The majority of the monthly increase was driven by crude and condensate shipments. Gulf production grew by 3.5 million barrels per day but still lagged 11.4 million barrels behind previous levels. These figures indicate only a partial recovery prior to the recent decline in vessel traffic.
The IEA also noted that global observed oil inventories grew by 21 million barrels in June, marking their first monthly increase in four months. Oil stored on water increased by 117 million barrels, while onshore stocks decreased by about 96 million barrels. Government releases contributed to the onshore decline, accounting for 44 million barrels. Exports of refined products and liquefied petroleum gases from the Gulf remained below half of pre-conflict levels, whereas crude exports approached nearly three-quarters of previous rates.
Weekly increases push both benchmarks higher
The U.S. Energy Information Administration reported that Brent spot prices averaged $85 a barrel in June, which is $22 less than in May. Prices later dipped below $70 on July 1 before rebounding during the first half of July. The agency estimated that global oil inventories shrank by 5.1 million barrels per day during the second quarter. Additionally, it projected that production shut-ins averaged 8.3 million barrels daily in June, down from a peak of 11.2 million in May.
On Friday, Brent settled at $12.09 above its July 10 closing of $76.01, while WTI finished $11.08 higher than its previous close of $71.41 from one week earlier. These movements represented weekly gains of approximately 15.9% for Brent and 15.5% for WTI. Energy stocks were the only major U.S. market sector to close higher on Friday. Both oil contracts ended near their session highs, concluding a week characterized by substantial price increases and decreased tanker activity through Hormuz.