Oil prices dipped in Friday trading but remained on course for a weekly gain of around 6% for Brent and 5% for WTI, as the near-total halt of tanker movements through the Strait of Hormuz injected a persistent risk premium into crude markets. The disruption followed a sharp escalation in US-Iran military exchanges that saw Tehran strike American military infrastructure in Gulf states and Washington hit Iranian air-defence and missile sites, pushing a three-week-old ceasefire to the brink.

The price advance was capped, however, by several countervailing forces. The Trump administration’s decision to avoid targeting Iranian energy infrastructure, and the president’s assertion that he does not expect a return to full-scale war, provided some reassurance to traders. At the same time, demand-side anxieties weighed on sentiment: US jobless claims data pointed to a labour market in a “slow-hire, slow-fire” mode, while Chinese producer price inflation surged to a four-year high, squeezing manufacturers’ margins and limiting their pricing power. New York Fed President John Williams reinforced the view that energy prices are likely near their peak and should decline over the next six to twelve months, citing intact market fundamentals.

The operational impact on global energy flows is already material. Ship-tracking data showed that tanker transits through Hormuz, which before the conflict carried about 20% of daily global oil and gas supply, fell to near zero on Thursday. War-risk insurance for vessels has been repriced with as little as six hours’ notice, reflecting the rapid shifts in security conditions. India, the world’s third-largest oil consumer, announced plans to build a new strategic petroleum reserve in Mangalore with a capacity of 1.75 million tonnes, a direct response to the supply vulnerability exposed by the strait’s closure. The International Energy Agency warned that a prolonged crisis could upend its forecast of a substantial oil surplus next year, noting that a durable peace agreement is a “necessary condition” for normalising supply.

Diplomatic channels remain active. Qatar, Pakistan and other regional intermediaries are working to de-escalate tensions and revive nuclear-deal negotiations, according to reports from Washington. Technical-level talks between US and Iranian negotiators are said to be continuing. For markets, the immediate milestone is any sign that commercial shipping can safely resume through Hormuz; without it, the geopolitical risk premium will persist even as demand-side headwinds gather.