Oil prices rose more than 3% on Friday. This followed statements from U.S. President Trump and Iran's Foreign Minister, which further dampened market hopes for an agreement to end attacks and seizures on vessels around the Strait of Hormuz. Brent crude futures in London settled at $109.26 per barrel, up $3.54, or 3.35%. U.S. West Texas Intermediate (WTI) crude futures settled at $105.42 per barrel, up $4.25, or 4.2%. For the week, Brent crude gained 7.84% and WTI crude rose 10.48%, driven by uncertainty surrounding the fragile ceasefire agreement between the U.S. and Iran. An analyst from Commerzbank stated: "The rhetoric between the U.S. and Iran has once again become significantly more confrontational. Although the ceasefire is holding, hopes for a swift reopening of the Strait of Hormuz have faded." Iranian Foreign Minister Araghchi said on Friday that Iran has "zero trust" in the U.S. and is willing to negotiate only if Washington shows a serious attitude. He added that Iran is prepared to return to fighting but is also open to seeking a diplomatic solution. Vandana Hari, founder of the energy market analysis firm Vanda Insights, noted: "Market focus has shifted back to the stalemate and the blockade of the Strait of Hormuz, with the tail risk of renewed military escalation still present." Iran's Islamic Revolutionary Guard Corps reported that 30 vessels transited the strait from Wednesday night to Thursday. While this is significantly lower than the pre-conflict daily average of 140 vessels, it represents a notable increase if confirmed. Tamas Varga, an analyst at PVM, commented: "A growing number of vessels are attempting to transit the strait... although for now, this impacts market sentiment more than the actual oil supply-demand balance." As the strait remains blocked, global oil inventories continue to decline. Phil Flynn, a senior analyst at Price Futures Group, stated in a report: "The world is depleting its oil safety reserves at a historic pace. While strategic reserve releases and demand suppression have prevented immediate chaos, the margin for error is shrinking rapidly. A prolonged blockade of the Strait of Hormuz will lead to tightening physical markets, potential shortages of refined products, and increased upward pressure on oil prices in the coming weeks and months." Shipping analysis firm Kpler reported on Thursday that 10 vessels transited the strait in the past 24 hours, compared to a daily average of only 5 to 7 in recent weeks.
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