Oil prices hold near $95 as Gulf tensions keep markets on edge

London (TIP): Global oil prices remained elevated on Friday, June 5, as traders continued to monitor escalating tensions in the Middle East, uncertainty surrounding US-Iran negotiations and the prolonged disruption in the Strait of Hormuz, which has now entered its 96th day.
Brent crude futures were trading around $95.36 per barrel on Friday, while US West Texas Intermediate (WTI) crude hovered near $93.06 a barrel, according to latest market data. Both benchmarks remained on course for weekly gains amid fears of a prolonged energy supply disruption linked to the Gulf crisis.
The oil market has remained highly volatile in recent days following Iran’s missile and drone attacks towards Kuwait and Bahrain, developments that intensified concerns about the possibility of a wider regional conflict involving key Gulf energy producers.
Investors are also closely watching stalled diplomatic efforts between Tehran and Washington. Hopes for a breakthrough in negotiations have weakened after continued disagreements over regional security issues and ceasefire conditions linked to ongoing conflicts in Lebanon and the Gulf region.
The Strait of Hormuz remains the central concern for global energy markets. The narrow waterway, located between Iran and Oman, handles nearly one-fifth of the world’s oil shipments under normal conditions. Shipping activity through the route continues to face severe disruption due to military tensions, security threats and restrictions on maritime movement.
Analysts say even partial disruptions around Hormuz have added a major geopolitical risk premium to oil prices.
“Markets remain extremely sensitive to any signs of escalation in the Gulf,” an energy analyst said. “The longer the Hormuz disruption continues, the greater the fear of supply shortages and inflationary pressure worldwide.”
Shipping insurers have significantly increased premiums for vessels operating in the Gulf region, while several companies have reduced tanker movements because of security concerns. Some energy firms have also suspended loading operations at regional terminals after reports of drone and missile threats targeting infrastructure. Despite Friday’s relatively stable trading, oil prices remain substantially higher than pre-crisis levels. Brent crude was recorded near $95.47 per barrel on June 5, according to commodity tracking data, although prices remain below the extreme highs touched earlier during the escalation
Earlier this week, Brent crude briefly approached the $100-per-barrel mark after reports that Iran had suspended indirect communications with Washington and threatened broader restrictions on maritime routes, including the Bab el-Mandeb Strait near Yemen.

The continuing energy crisis has raised concerns among major oil-importing economies including India, China, Japan and European nations. Higher crude prices are expected to increase fuel costs, transportation expenses and inflationary pressures globally, potentially slowing economic growth. International financial institutions have also begun warning about the broader economic impact of the Gulf crisis. Fitch Ratings recently lowered its global growth outlook, citing rising oil prices and supply disruptions linked to the Middle East conflict. Meanwhile, analysts note that weakening demand in some major economies has prevented oil prices from rising even more sharply. Concerns over slower industrial activity and reduced fuel consumption, particularly in China and parts of Europe, have partly offset fears of severe supply shortages.