The shadow of the Strait of Hormuz on oil; the price of oil is on the way to record weekly growth

Oil prices fell slightly in global trading on Friday, but are on track for a weekly gain due to uncertainty over supplies from the Middle East and a larger-than-expected decline in crude inventories in the United States.

Sefir Arjan-Economic Group: The price of Brent crude oil futures decreased by 50 cents, equivalent to 0.47%, to 105 dollars and 42 cents per barrel. Meanwhile, the price of West Texas Intermediate (WTI) crude oil futures decreased by 49 cents, equivalent to 0.50%, to 97 dollars and 48 cents per barrel.

On Thursday, West Texas Intermediate (WTI) crude oil prices rose more than 3 percent after reports of a significant drop in U.S. crude stockpiles — caused by production shutdowns due to hurricanes.

In total, since the beginning of this week, Brent oil has increased in price by 0.49% and West Texas Intermediate oil has experienced a jump of 5.91%.

"Uncertainty in the Middle East and concerns about the continued flow of oil through the Strait of Hormuz have caused the market to factor in a significant additional risk premium," ING Bank analysts wrote in a note. They added that in order to create more confidence in the market regarding the continuation of the stable flow of oil from this region, it is necessary to reach some kind of agreement between the United States and Iran.

Kepler Energy Information Company announced that the average oil flow through the Strait of Hormuz in the seven days ending October 13 was 11.62 million barrels per day, which is about 68% of the baseline level of 17.15 million barrels per day. Kepler analysts wrote in a report on Thursday: "If a comprehensive political agreement is not reached, the return of oil flow from the Strait of Hormuz to normal is expected to be slower and more volatile."

The International Energy Agency agreed on Thursday to release more than 20 million barrels of diesel and any oil left over from an unprecedented emergency stockpile release pledged in March to boost supply and curb rising prices.

"In the previous trading session, oil prices rose overnight, indicating that investors were unhappy with these measures," Haitong Futures said in a note. "What really calms the oil market is the reduction of tensions in the Middle East."

The Trump administration is considering lifting sanctions on some of the so-called shadow fleet vessels that have carried oil and petroleum products from countries such as Russia, Iran and Venezuela, a US official said on Wednesday, in an effort to reduce global shipping rates to record levels.

These talks take place a few days after US President Donald Trump temporarily lifted sanctions on Russian diesel. The mentioned action was criticized by Volodymyr Zelensky, the president of Ukraine, European countries and some of Trump's Republican allies.

Oil prices continued to rise; The price of Brent oil increased by 99 cents to $83.48 and West Texas Intermediate reached $78.84.

After falling more than 2% in the previous day's trading, oil prices rose slightly on Tuesday, and Brent oil reached 92 dollars and 44 cents.

The crisis in the Strait of Hormuz and the concern about disruption of supply have put pressure on the global aluminum market so that prices have reached the highest level in the last seven weeks and global reserves are close to historical lows.