Global oil prices recovered on Friday after suffering steep losses earlier in the week. However, both major crude benchmarks remained on track for a weekly decline of around 12 percent as markets reacted to expectations of a possible de-escalation in the Iran war.

Brent crude futures for January delivery rose by $1.29, or 1.31 percent, to $99.58 per barrel as of 05:04 GMT. US West Texas Intermediate (WTI) crude futures increased by 86 cents, or 0.95 percent, to $91.38 per barrel.

Brent briefly crossed the $100 mark during morning trading. Both contracts recorded gains for a second consecutive day.

Despite the recovery, Brent was heading towards a weekly decline of approximately 12 percent. WTI was also expected to lose around 12.1 percent over the week.

US Election Results Triggered Oil Price Decline

Oil prices came under heavy pressure earlier in the week following the US midterm elections.

The Democratic Party made major gains, taking control of both the Senate and the House of Representatives from President Donald Trump’s Republicans, according to the reported election results.

Investors viewed the political shift as a possible factor that could encourage efforts to reduce tensions surrounding the US-Israeli war against Iran.

The conflict has entered its ninth month, keeping global energy markets highly sensitive to developments in the Middle East.

Oil prices dropped by around 8 percent on Wednesday alone, reaching their lowest levels in two months. The decline reflected hopes that the political developments in Washington could create room for de-escalation.

However, concerns about oil supplies from the Middle East have continued to limit further losses.

Tanker Attacks in Strait of Hormuz Raise Supply Concerns

Oil prices recovered on Thursday and Friday after reports of increased attacks on tankers in the Gulf and the Strait of Hormuz.

The Strait of Hormuz is a crucial shipping route for oil exports from the Middle East. A large share of the region’s oil shipments passes through this narrow waterway.

Any disruption to tanker movements could create serious concerns about global energy supplies. This has made the situation particularly important for oil traders and importing countries.

Iran said on Thursday that three additional tankers had been attacked in the Strait of Hormuz.

Data from the United Kingdom Maritime Trade Operations (UKMTO) also suggested that attacks on oil-carrying vessels were continuing at close to record levels.

These developments have raised questions about whether oil shipments can move safely through the region, even if diplomatic efforts reduce wider military tensions.

Analysts Warn Oil Markets Could Remain Volatile

KCM chief analyst Tim Waterer described Friday’s increase as a technical recovery following the sharp selloff triggered by the US election results.

However, he said the underlying supply problem had not disappeared. Attacks in the Strait of Hormuz were continuing despite the political changes in Washington.

Waterer said oil prices could remain supported during market declines until there was a credible route towards safer and cheaper shipping through the Gulf.

He also warned that any further escalation could trigger sharp price movements.

What Could Happen to Oil Prices Next?

The oil market is currently facing two competing factors. Expectations of a possible reduction in the Iran conflict are putting downward pressure on prices.

At the same time, tanker attacks and uncertainty surrounding shipments through the Strait of Hormuz are supporting crude prices.

If tensions ease and shipping routes become safer, oil prices could face further pressure. However, continued attacks or disruptions to supplies could push prices higher again.

For now, traders are closely watching developments in the Middle East. Friday’s rebound above $99 for Brent shows that supply concerns remain a major factor, even as the market prepares for a sharp weekly decline.

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