Oil prices rose slightly on Friday ahead of a long holiday weekend in the United States, as markets maintained cautious optimism over peace efforts between the U.S. and Iran in the Middle East. However, investors are still waiting for clearer evidence of stable supply before confirming a stronger market direction.

Oil Prices Recover Slightly

At the time of writing, Brent crude futures rose 17 cents, or 0.24%, to $72.10 per barrel. Meanwhile, West Texas Intermediate crude gained 14 cents, or 0.20%, to $68.83 per barrel.

U.S. markets will be closed on Friday ahead of the Independence Day holiday on Saturday, which could reduce short-term market liquidity.

Weekly Moves Remain Limited

In the previous session, both Brent and WTI touched their lowest levels since before the U.S.-Israeli war with Iran began in late February.

For the week, Brent was down slightly by 0.02%, while WTI was up 0.12%. These were the smallest weekly moves for both benchmarks in months, suggesting that the market is temporarily balanced between peace hopes and supply risks.

Market Sentiment Remains Cautious

According to Tim Waterer, chief market analyst at KCM Trade, the market is currently in a state of “guarded optimism.” Investors want to believe that peace efforts will hold, but they remain cautious until there is clearer evidence from shipping activity and actual supply flows.

This reflects the current mood in the oil market: geopolitical risk has eased, but it has not disappeared completely.

Supply Through the Strait of Hormuz Improves

One key factor supporting market sentiment is the reopening of the Strait of Hormuz. Before the conflict began, this shipping route carried around one-fifth of the world’s daily supply of oil and liquefied natural gas.

Several countries are now ramping up production again as the route becomes more accessible. Kuwait reportedly increased oil output to 1.65 million barrels per day in June, sharply higher than 580,000 barrels per day in May, after boosting exports following the interim peace agreement between the U.S. and Iran.

Saudi Arabia Accelerates Exports to Asia

In addition to Kuwait, at least five supertankers carrying a combined 10 million barrels of Saudi oil have exited the Strait of Hormuz.

Saudi Aramco has also shifted to spot pricing to speed up sales in Asia. This suggests that regional supply is gradually being restored, helping ease some of the market’s supply concerns.

Conclusion

Oil prices edged slightly higher as the market maintained hopes that peace efforts in the Middle East could continue to hold. However, the recovery remains cautious as investors still need clearer signs of stability in shipping activity and supply flows through the Strait of Hormuz.

In the short term, developments in the U.S.-Iran agreement, tanker traffic through Hormuz, and the pace of production recovery from major oil producers will remain key drivers of oil prices.

Source: Reuters