Oil prices rose Friday following attacks on Saudi energy infrastructure and as markets assessed the risk premium from the ongoing closure of the Strait of Hormuz. Brent crude futures gained 0.87 percent to $96.75 a barrel, while West Texas Intermediate futures were up 1.06 percent at $98.91 a barrel.
The initial relief from a two-week ceasefire announcement has given way to underlying doubts, with fighting continuing despite the agreement brokered by Pakistan. All eyes remain on tanker flows through the Strait of Hormuz ahead of peace talks scheduled in Pakistan.
Analysts suggest Pakistan will push for a durable peace agreement but may lack leverage to reopen the critical Strait of Hormuz, a key artery for oil and gas. Iran has proposed charging fees for ships passing through the strait, an idea met with resistance from Western leaders and the UN.
Attacks on Saudi Arabia's oil production capacity have cut output by approximately 600,000 barrels per day and reduced throughput on its East-West Pipeline by 700,000 barrels per day. JPMorgan analysts noted this "shifts the narrative from episodic disruption to a measurable supply shock."
Around 50 infrastructure assets in the Gulf have been damaged, and approximately 2.4 million barrels per day of oil refining capacity have been taken offline since the conflict began.