Oil prices end volatile session; up sharply for week amid supply fears

Oil markets closed a choppy session and recorded a strong weekly gain as traders balanced supply concerns against signs of potential diplomacy. Brent crude futures settled at $105.33 a barrel while U.S. West Texas Intermediate (WTI) settled at $94.40, with intraday swings reflecting mixed headlines.

Traders said the swing in prices was driven primarily by worries over disruptions to Middle East supplies and reports of possible diplomatic talks. Reuters reported that Iranian Foreign Minister Abbas Araqchi was expected to travel to Islamabad to discuss proposals for resuming talks with the U.S., a development that briefly eased some supply fears before volatility returned. For the week, Brent gained about 16% and WTI nearly 13%.

Supply-side uncertainty remains the dominant near-term price driver. Risks to shipments through strategic chokepoints and continued disruptions in regional production underpin a bullish tilt, even as some data releases and market chatter produce short-lived pullbacks. Market participants are closely watching inventory reports and shipping data to assess whether physical tightness is broadening.

The recent price surge has implications for inflation and monetary policy discussions. A sharp rise in energy costs can feed into consumer price measures and complicate central banks’ policy calibration, while also weighing on real incomes and growth in energy-importing economies. Investors are consequently weighing macro sensitivity alongside event-driven supply risk.

Analysts expect volatility to persist in the coming days, with outcomes hinging on the trajectory of diplomatic engagement and fresh supply data. A credible de‑escalation could prompt a pullback in prices, but renewed tensions would likely push benchmarks higher. Positioning and risk management will remain key for market participants during this uncertain period.