Baghdad: Despite a drop in prices, oil remains poised for significant weekly gains, exceeding 8%, as geopolitical tensions in the Middle East impact shipping lanes and raise concerns over prolonged supply disruptions.

According to National Iraqi News Agency, Brent crude futures fell to $104.61 per barrel, marking a decline of $3.02 or 2.81%. Similarly, US West Texas Intermediate (WTI) crude concluded trading at $100.05 per barrel, down $2.43 or 2.37%. Both benchmarks had reached their highest levels since mid-May during the session.

The initial gains reversed after the Financial Times reported that Middle Eastern foreign ministers were in discussions with Iran to establish a temporary agreement for regulating shipping through the crucial Strait of Hormuz. This potential agreement prompted traders to reassess the risks, causing both Brent and WTI to retreat from their earlier highs.

The market sentiment was significantly influenced by reports regarding the Strait of Hormuz, a vital waterway for global oil t
ransportation. Last Thursday, Brent and WTI prices surged by over 6% following a series of attacks on ships in the region. However, the prospect of diplomatic talks has led to a reassessment of the situation.

The International Energy Agency (IEA) highlighted that Saudi crude oil supplies dropped by 2.3 million barrels per day during the month, reaching a low of 6 million barrels per day in August, the lowest in over thirty years. This decline is attributed to attacks targeting Saudi energy facilities.

Additionally, preliminary ship-tracking data indicated a decrease in the number of vessels passing through the Strait of Hormuz, with only seven transits recorded on Thursday, compared to 11 on the previous day.