West Texas Intermediate (WTI) crude oil prices fell to around $99.00 per barrel during Asian trading on Friday, ending a four-day winning streak despite intensifying conflict between the US and Iran [1]. The recent escalation has heightened concerns over prolonged disruptions to global energy supplies, with top US officials warning President Donald Trump that the war could persist through the remainder of his term, which ends in January 2029 [1]. Iranian leaders remain resolute, viewing the conflict as existential and claiming to have rebuilt missile capabilities, potentially threatening further attacks on US and Gulf assets if hostilities escalate [1].
The past two weeks have seen increased military activity, including US strikes on Iranian oil tankers and Iranian missile attacks on US warships, tankers in the Persian Gulf, and American assets in neighboring countries [1]. In a related development, Yemen's Houthi forces, backed by Iran, have seized the strategic Red Sea port city of Mokha from Saudi-backed forces, positioning themselves just 75km from the Bab al-Mandab Strait, a critical trade route linking Asia and Europe [1]. While the Houthis claim they do not threaten international shipping, they have reiterated threats against Saudi vessels, especially as Saudi Arabia has shifted more oil exports to the Red Sea following the closure of the Strait of Hormuz due to the US and Israel's war [1].
Strategists at BNY note that President Trump continues to justify the economic fallout, including higher fuel prices, as necessary for non-proliferation goals, asserting that oil prices would decline once the conflict ends [1]. Meanwhile, bond markets are showing resilience despite Brent crude reaching $101.50 per barrel and Dutch TTF forward gas prices remaining above €80/MWh, as investors attempt to look past the energy shock and its inflationary pressures [1].
CONCLUSION
WTI oil prices have retreated amid escalating US-Iran tensions and new disruptions in the Red Sea, underscoring the conflict's significant impact on global energy markets. While President Trump frames the economic costs as a necessary measure for security, markets remain volatile, with elevated energy prices feeding inflation concerns and bond markets striving for stability.