Oil experienced a two-phase week shaped by developments around the Strait of Hormuz, one of the most strategic chokepoints in global energy trade. Early in the week, Brent prices fell by roughly 11 %, as markets anticipated a formal agreement between Washington and Tehran to reopen the passage and ease regional tensions. This prospect fueled expectations of a gradual normalization of oil flows, reducing the risk premium embedded in prices.
The reversal came on Thursday, when an Iranian parliamentary commission reviewed a draft law aimed at banning American and Israeli vessels from transiting the strait, with fines reaching up to one-fifth of the cargo value. This move reignited concerns over maritime security and the market’s ability to absorb a potential supply shock. Brent rebounded to around 84 dollars before giving back some ground on Friday, reflecting volatility driven by geopolitical uncertainty and the lack of clarity regarding Tehran’s true intentions.
For investors, this sequence underscores how deeply oil prices remain tied to geopolitical dynamics. The week’s movements highlight how quickly expectations can shift, from a scenario of diplomatic easing to fears of major supply disruption. In a context where Middle Eastern tensions remain elevated and markets closely monitor global demand trends, oil may continue to trade within a high-volatility zone. The central question becomes whether diplomatic signals can hold and whether regional actors can avoid an escalation that would directly impact prices. For investors, caution is warranted, but such volatility can also create tactical opportunities for those able to navigate an environment where fundamentals and geopolitics are tightly intertwined.