Oil prices are on track for weekly gains, with Brent futures and U.S. West Texas Intermediate (WTI) crude showing increases despite dips on Friday. Disruptions in the Middle East are outweighing efforts by the U.S. and the International Energy Agency (IEA) to ease supply concerns.
The U.S. issued a 30-day license allowing countries to purchase Russian oil and petroleum products. Treasury Secretary Scott Bessent stated this aims to stabilize global energy markets amid the conflict with Iran.
Analysts note this measure reduces friction but does not add significant new barrels to the market. The primary market concern remains the potential for prolonged conflict and severe damage to oil infrastructure, leading to lasting supply losses.
This development follows the U.S. Energy Department's announcement to release 172 million barrels from its Strategic Petroleum Reserve, coordinated with the IEA's planned release of 400 million barrels. However, any relief from these measures has been overshadowed by escalating Middle East risks.
Iran's stance on continuing the conflict and potentially keeping the Strait of Hormuz shut has heightened tensions. Two fuel tankers in Iraqi waters were struck by explosives, leading to a complete halt in operations at Iraq's oil ports.
Goldman Sachs predicts Brent oil will average over $100 a barrel in March, citing ongoing volatility due to the Iran conflict, infrastructure damage, and Strait of Hormuz disruptions. The U.S. Navy, potentially with an international coalition, may escort vessels through the Strait of Hormuz when militarily feasible.