SINGAPORE, Aug 21 - Oil markets were mostly flat in early Friday trading but were on track for a second week of gains as the stalemated U.S.-Iran war continued to weigh on supply from key producers in the Middle East.
Prices and recent moves
By 0142 GMT, Brent crude futures were up 4 cents at $93.82 a barrel, following a 2.4% rise in the previous session. U.S. West Texas Intermediate (WTI) futures were down 6 cents at $86.78 a barrel after climbing 2.3% in the prior session. Over the last five trading days, Brent has gained more than 7% while WTI has climbed over 8%, with both benchmarks reaching their highest levels since July 24 during that stretch.
Supply concerns and regional developments
Traders cited worries that the inconclusive state of the U.S.-Israeli war on Iran will continue to limit supply from key oil producers including Saudi Arabia, Iraq, the United Arab Emirates and Kuwait. An earlier peace deal between them expired this week, and the report said there had been no effort by either side to restart talks.
Market participants were also responding to strong rhetoric from Washington. U.S. President Donald Trump warned of consequences for nations that provided support to Iran, threatening what he described as "economic warfare and isolation on an unprecedented scale" for Tehran and suggesting potential retaliation against countries that offered Iran any lifeline.
On the diplomatic and economic front, the United Arab Emirates suspended all financial and economic transactions with Iran until further notice, a move that underscores the strained ties between a major Gulf oil producer and Tehran.
Analyst perspective
IG analyst Tony Sycamore said, "Both sides are dug in but lacking the luxury of time to play the waiting game, against a backdrop of crude prices grinding unerringly higher." The comment reflected market sentiment that the standoff could sustain upward pressure on crude.
Human and logistical impact
The conflict itself has produced severe human costs, with thousands of people killed since the outbreak of the Iran war, which began on February 28 when the U.S. and Israel launched military strikes on Iran. Tehran’s subsequent blockade of the Strait of Hormuz and a series of Iranian attacks on energy facilities across the region have disrupted global oil and gas flows.
Shipping data cited in the report showed that transit through the Strait of Hormuz on Wednesday was unchanged from the day before, with nine vessels passing through the waterway - a level described as far below pre-war traffic. Prior to the Iran war, shipments equivalent to about one-fifth of global consumption moved through the Strait.
Implications
With supply routes and regional financial ties under strain, oil benchmarks have shown sensitivity to geopolitical developments and statements from national leaders. Short-term price stability on intraday trading contrasts with a week-on-week advance driven by persistent concerns over curtailed flows from major Middle East producers.