Oil markets inched higher on Friday as tensions escalated between the US and Iran, making traders cautious again. With this, oil markets reversed the sharp losses recorded earlier this week, when prices had fallen on hopes of a diplomatic breakthrough between the two nations and the possible reopening of the Strait of Hormuz.West Texas Intermediate crude reached $96.66 or 1.95% higher, after recording earlier gains of 3%. Brent Crude was trading at $101.6 or 1.52% up as of 7:05 am IST.The rise came after the US military on Thursday said that it had launched retaliatory strikes on Iranian targets linked to attacks on American forces. Iran, however, accused Washington of violating the ceasefire, saying US forces targeted two ships in the Strait of Hormuz and struck civilian areas.Only days earlier, oil was moving sharply in the opposite direction. On Wednesday, prices fell and global stock markets advanced amid expectations that the United States and Iran were moving closer to an arrangement that could allow crude shipments to resume through the Strait of Hormuz.Brent crude, which had traded above $115 a barrel earlier in the week, dropped 7.8% to $101.27. Prices briefly fell below $97 before climbing again after President Donald Trump warned he would launch bombing “at a much higher level and intensity” if Iran rejected his proposed agreement.The status of the Strait of Hormuz remains a major concern for the global economy. The war has effectively shut off a crucial route for oil tankers leaving the Middle East region, raising fears over disrupted supply and sustained inflation. A breakthrough that reopens the passage could help restore oil movement and reduce broader price pressures.Alongside the geopolitical turmoil, concerns are also mounting over suspiciously timed market activity aligning with oil price moments. According to Reuters, bets worth up to $7 billion were placed across multiple exchanges, fuel products and derivatives during March and April before major Iranian policy announcements by US President Donald Trump.The scale far exceeds the previously disclosed $2.6 billion and has already added to concerns over possible misuse of sensitive information. Reuters reported in April that the US Commodity Futures Trading Commission is examining the trades, according to a person familiar with the matter, though the regulator has not publicly confirmed any formal investigation.Meanwhile, tensions in the Middle East have continued to intensify after US and Israel launched joint strikes on Iran on February 28. In retaliation to the attack, Tehran tightened its noose on the crucial Strait of Hormuz, the world’s oil pipeline that carries 20% of global energy supplies.
