Brent crude awaits trading after price drop; WTI falls 1.98%.
Oil prices fell more than 2% in early Asian trading on Friday, following strong gains in recent days driven by the Middle East conflict.
West Texas Intermediate crude was down 2.09% at $79.32 per barrel around 0015 GMT, after surging 8.5% on Thursday to $81.01. Brent North Sea Crude, which rose 4.9% on Thursday, had not yet begun trading.
“Further action to reduce pressure on oil is imminent, and the oil [price] seems to have pretty much stabilised,” US President Donald Trump said on Thursday.
Earlier this week, Trump ordered the US Development Finance Corporation to provide political risk insurance for all maritime trade through the Gulf.
He said the US Navy would, **“if necessary,” begin escorting tankers through the Strait of Hormuz — a vital chokepoint for crude that Iran has effectively closed — “as soon as possible,” to help ensure the free flow of energy supplies.
On stock markets, Japan’s Nikkei index was down 0.8% shortly after the open, while South Korea’s benchmark Kospi slipped 1.2% as investors reacted to rising geopolitical risks and energy market uncertainty.
European exchanges dropped roughly 1.5% on Thursday, with Wall Street’s main indexes pulling back as well.
Divergence
Oil markets showed a sharp divergence early in global trading, reflecting a growing geopolitical risk premium tied to escalating tensions between the United States, Israel and Iran across the Gulf region. Traders are pricing in the threat of disrupted flows through critical shipping routes such as the Strait of Hormuz, where a significant share of the world’s crude normally passes, even as supply fundamentals vary across benchmarks.
At 00:52 GMT, benchmark oil prices moved in different directions:
- WTI Crude was lower, reflecting relative insulation of the US market from immediate Middle East supply risk.
- Brent Crude climbed, as concerns about global supply interruptions persist.
- Other regional grades, such as Murban crude, surged sharply, signalling intense regional risk pricing.
This divergence highlights how global geopolitical developments are reshaping market pricing, with seaborne crude benchmarks and regional grades bearing the brunt of heightened risk, while domestic‑focused benchmarks show more muted moves.
Oil and Gas Market Update
- WTI Crude: $78.93 (▼ $2.08, –2.57%)
- Brent Crude: $85.41 (▲ $4.01, +4.93%)
- Murban Crude: $94.51 (▲ $13.02, +15.98%)
- Natural Gas: $2.976 (▼ $0.027, –0.90%)
The standout move came from Murban crude, the flagship export grade of the United Arab Emirates, which surged nearly 16%, highlighting intense concerns over supply risks in the Gulf. Murban is particularly sensitive to regional disruptions because it flows directly through the Strait of Hormuz, the world’s most critical oil shipping corridor.
Meanwhile, Brent crude, the global benchmark linked to seaborne oil markets, climbed close to 5%, reflecting fears that Middle Eastern shipping routes could face further disruption. In contrast, WTI fell over 2.5%, showing how US-focused oil markets remain relatively insulated from immediate Gulf supply risks.
Insurance premiums for tankers crossing Gulf waters have reportedly jumped, prompting traders to factor in potential supply shocks and escalating the risk premium on Gulf-exported crude.
In contrast, West Texas Intermediate (WTI) slipped more than 2.5%, underscoring the relative insulation of the US domestic market from Middle Eastern supply risks. WTI prices are driven largely by North American production, particularly US shale output.
Natural gas markets remained relatively calm, with prices edging slightly lower, indicating that traders see the current geopolitical tensions as primarily affecting oil supply chains rather than global gas flows.
Market outlook
Energy traders are now closely monitoring developments in the Gulf, with attention focused on potential disruptions to shipping routes, tanker insurance costs, and regional crude output.
Any disruption to tanker traffic or export terminals in major producers such as Saudi Arabia, United Arab Emirates or Qatar could quickly push Brent crude toward the $90–$100 per barrel range.
For now, the widening gap between Brent, Murban and WTI underscores a market increasingly driven by regional supply risks rather than underlying demand fundamentals.
