Oil prices rallied on Friday, pushing both global and U.S. benchmarks higher for the week on a mix of supply concerns linked to Middle East maritime incidents and uncertainty surrounding a U.S.-Russia diesel supply agreement.
At 15:31 ET (19:31 GMT), December Brent crude futures, the global benchmark, were trading up 3.4% at $109.48 a barrel, while November U.S. West Texas Intermediate (WTI) crude futures advanced 3.3% to $101.17 a barrel. For the week, Brent was up 4.5% and WTI had climbed 10.1%.
Maritime attacks keep markets on edge
Although overall crude flows from the Middle East have largely recovered to levels close to those prior to the conflict, market concern has been elevated amid a recent uptick in attacks on ships transiting key waterways.
Iran has stepped up strikes on commercial vessels passing through the Strait of Hormuz as tensions with the U.S. persist over control of the waterway. At the same time, heavy fighting between Iran-backed Houthi forces and the Saudi-backed government in Yemen has intensified worries about supply threats in the Bab el-Mandeb Strait.
This week, the Houthis conducted attacks on Saudi Arabian energy infrastructure and airports that were linked to civilian casualties. Authorities reported 13 deaths at King Khalid International Airport last weekend. On Thursday the Houthis also struck the Presidential Palace in Aden, the interim capital of Yemen’s internationally recognized government.
Shipping and freight dynamics also figured in market assessments after reports that the U.S. was considering easing sanctions on so-called shadow fleet vessels that carry oil and refined products from sanctioned exporters. The tentative policy is intended to lower global freight rates and help tame surging fuel prices, but industry trackers questioned the scope of any potential relief.
Shipping intelligence firm Kpler said such a sanctions relief plan "may do little to alleviate record freight rates." Kpler estimated that of roughly 160 OFAC-sanctioned very large crude carriers, only about 24 could realistically re-enter mainstream trade once factors such as vessel age and ownership restrictions were considered.
Diesel draws political and market attention
Diesel supply became a focal point this week after President Donald Trump announced a notable diesel supply arrangement with Russian President Vladimir Putin, aimed at relieving elevated diesel prices. The pact drew criticism and legislative pushback in Washington.
Ukraine said it would resume strikes on Russia’s energy infrastructure even as Trump sought to craft an energy ceasefire between the two countries. The president expressed skepticism about Ukrainian president Volodymyr Zelenskyy in a Newsmax interview on Thursday, saying, "Zelenskyy is not a good guy for us to deal with. If they’re going to end up with a settlement of some kind, they’re not going to do it with him. He doesn’t want to settle. He says he wants to settle, but he doesn’t." The president had also said last weekend that it was time for Ukraine to get a new president.
Ukrainian President Zelenskyy criticized the diesel arrangement in remarks to a European Council meeting, saying, "This 'Diesel Deal' will never be enough to offset the impact of the Strait of Hormuz on global markets. But it will put more money straight into Putin’s pocket to fund this war."
The proposed diesel pact prompted action in Congress: a group of 18 U.S. Representatives, comprising 17 Democrats and 1 Republican, introduced legislation to block the deal.
Market analysts were mixed on how effective additional Russian diesel shipments might be. Walt Chancellor, an energy strategist at Macquarie, said Russia could in broad terms supply diesel given ongoing exports of nearly 150,000 barrels per day and the potential political value to Moscow from the arrangement. He noted, however, that any meaningful increase in Russian diesel exports would depend on refining restarts and seasonal changes in domestic Russian demand. "Every bit helps, but we don’t expect this agreement to significantly change the underlying situation with Russian diesel," Chancellor added.
International Energy Agency moves and outlook
Separately, the International Energy Agency agreed to release more than 20 million barrels of diesel, and indicated it would accelerate the release of remaining volumes pledged under an emergency reserve release announced in March. Despite this, the IEA warned that global diesel markets could remain tight well into 2027 and projected a decline in global oil demand this year.
Traders continue to weigh these policy steps and market signals against the real-world challenges of shipping constraints, refinery availability and ongoing geopolitical risks. Freight rate dynamics, the technical capacity for sanctioned vessels to re-enter trade, and the logistical complexity of prioritizing diesel shipments are among the factors market participants say will determine whether policy moves and supply agreements translate into relief at the pump.
What this means for markets
In the near term, oil prices remain sensitive to developments that could further disrupt maritime transport or change the availability of refined products. While headline moves such as diplomatic agreements and strategic releases can influence sentiment and active flows, analysts and shipping trackers highlighted practical constraints that may limit the speed and scale of any impact on freight rates and diesel availability.
For the week, Brent and WTI's gains reflect a market balancing the potential for more diesel into global markets against continued uncertainty over shipping safety, sanctions policy, and refinery operations.
Contributors to reporting included Ambar Warrick and Scott Kanowsky.