LONDON — Oil prices ended lower on Friday after concerns about slowing global economic growth and weaker fuel demand outweighed persistent worries over disruptions to energy supplies linked to renewed tensions in the Middle East.
Brent crude futures settled down about 2%, while U.S. West Texas Intermediate crude also declined, reversing earlier gains as investors weighed mounting risks to global demand against continued uncertainty over supplies moving through the Strait of Hormuz, a key shipping route for oil and liquefied natural gas.
Trading remained volatile throughout the session as geopolitical developments continued to support a supply-risk premium. Shipping through the Strait of Hormuz has slowed following renewed military exchanges involving the United States and Iran, raising concerns over the movement of roughly one-fifth of global oil and gas shipments that normally transit the waterway.
However, analysts said worries about the global economic outlook limited the market's ability to sustain higher prices. Investors have increasingly focused on the possibility that slower growth could reduce fuel consumption, offsetting the impact of supply disruptions.
The International Energy Agency has warned that prolonged disruptions could alter expectations for oil balances, although it also noted that broader demand trends remain an important determinant of prices. At the same time, the agency has lowered its outlook for Russian oil production following damage to energy infrastructure from the conflict involving Ukraine, adding another layer of uncertainty to supply forecasts.
Market participants also monitored broader financial markets for signals about economic activity. Upcoming U.S. inflation and retail sales data, along with China's trade and gross domestic product figures due next week, are expected to provide fresh indications of the strength of fuel demand and the outlook for monetary policy in the world's largest economies.
Despite Friday's decline, both benchmark contracts remained on track for strong weekly gains after geopolitical tensions earlier in the week pushed prices sharply higher. Brent was poised for a weekly increase of around 7%, while WTI was set for a gain of roughly 6%, reflecting the market's continuing assessment of supply risks in the Gulf region.
Analysts said oil markets are likely to remain highly sensitive to developments in the Middle East as well as incoming economic data that could reshape expectations for global fuel demand. For now, traders continue to balance immediate supply concerns against growing evidence that slower economic activity may temper consumption and limit further price gains.
