Crude oil prices rose further in the global market on Friday. The ongoing tension between the US and Iran has drawn investors’ attention to the threats facing oil supplies from the Middle East.
Brent crude for November delivery rose 15 cents, or 0.2 percent, to $95.67 a barrel. U.S. West Texas Intermediate (WTI) also gained 26 cents, or 0.3 percent, to $91.56 a barrel.
The recent gains are not just a one-day move. Brent is up 7.1 percent for the week and WTI is up 9.8 percent. Both are on track for their biggest weekly gains since July.
Analysts are now focusing on potential supply disruptions in the Middle East. Shipping activity in the Strait of Hormuz is already significantly lower than usual. According to Reuters, only four commercial cargo ships passed through the vital waterway on Thursday, compared with a 10-day average of about 15 ships a day.
The Strait of Hormuz is a vital route for global energy trade. Escalating tensions in the region could disrupt the flow of oil and other fuels. This fear is forcing global buyers to pay extra.
On the other hand, the global diesel market is also under pressure. The average price of diesel in the United States reached a record high of $5.820 per gallon on September 3. This was higher than the previous record set in June 2022.
According to Reuters, the price of US diesel has increased by about 55% since February 28. Behind this increase are supply concerns in the Middle East and disruptions caused by Ukrainian attacks on Russian refineries.
The rising price of diesel is also important for the global economy because it is widely used in trucking, agriculture and industrial activities. Rising fuel costs can increase transportation and production costs. This can also affect the prices of food and other essential goods over time.
The continued rise in global oil prices is of particular importance for Pakistan. The country imports a large portion of its energy needs, so a prolonged rise in global prices could put pressure on import bills and local fuel prices.
However, the real risk in the current situation is the potential for a prolonged supply disruption, rather than a one-day price increase. If oil shipments from the Middle East remain disrupted, global market prices could remain under pressure.
