WTI maintains gains near $90.50 amid Middle East supply risks despite sharp weekly loss

• Recent tanker attacks in the Strait of Hormuz have revived concerns about Middle Eastern oil flows, lifting WTI.
• Continuing risks to Gulf transit will keep supporting prices during pullbacks, according to KCM chief analyst Tim Waterer.
• Expectations of de-escalation after the US election results leave oil heading for a weekly loss of over 11%.

At around $90.60 per barrel during Friday’s European trading hours, West Texas Intermediate (WTI) oil is advancing for a second consecutive day. The continuing Middle East conflict and lingering supply worries have maintained a floor under crude prices. A surge in tanker attacks in the Gulf and the Strait of Hormuz prompted the rebound, reviving fears of regional supply disruption along the sea route used for most Middle Eastern oil exports.

Friday’s price action amounted to a "technical recovery" after the sharp sell-off prompted by the US elections, Reuters reported, citing KCM chief analyst Tim Waterer. He stressed, however, that the underlying problems had not been resolved: risks to transit through the Strait of Hormuz remained despite the Democratic victory. Waterer said: "Until there is a credible path to safer, cheaper transit through the Gulf, oil is likely to remain supported on dips and prone to sharp moves on any escalation headlines,"

Despite the rebound, oil is still on course to lose over 11% this week. Behind the broader decline are expectations that the Iran war could de-escalate after election defeats for US President Donald Trump’s party. Earlier in the week, prices slumped as the US midterm results handed the Democratic Party control of both the Senate and the House of Representatives. That outcome fuelled hopes of a diplomatic settlement to the nine-month US-Israeli conflict with Iran.

Strait of Hormuz incident heightens oil supply worries

A maritime incident reported by Iran’s Revolutionary Guard at a key chokepoint presents fresh supply-side risks, according to Danske Bank’s analysts. The bank cited the Guard as saying that “two oil tankers and a tugboat caught fire after allegedly attempting unauthorised routes through the Strait of Hormuz,” highlighting how vulnerable flows remain through one of the world’s most important oil transit corridors.