Oil Prices Mixed as Hormuz Reopening Clashes With Lebanon Fighting

Global energy markets absorbed conflicting signals Friday as a U.S.-Iran memorandum to reopen the Strait of Hormuz eased immediate supply fears while fresh clashes in Lebanon and postponed follow-up talks kept traders cautious. Brent crude futures settled 0.3 percent lower at $79.59 a barrel after touching $80.37 intraday, while West Texas Intermediate rose 2.3 percent to $78.15; both benchmarks remained on track for roughly 8 percent weekly declines.

The memorandum signed Thursday committed both sides to clearing the waterway that normally carries one-fifth of world oil supply. Three Saudi supertankers moved 6 million barrels through on Thursday, joined by the Hong Kong-flagged Tong Lin Wan and the French LNG carrier Mraikh. Yet more than 500 vessels still waited to exit, traffic stayed far below the pre-war 120-130 daily transits, and at least 46 attacks on shipping since late February had already killed 14 seafarers, according to the International Maritime Organization. Mine-clearing operations could take weeks.

Lebanon developments quickly overshadowed the partial progress. Israeli strikes killed 16 people, and clashes with Hezbollah in southern Lebanon killed four Israeli soldiers, prompting cancellation of planned U.S.-Iran talks in Switzerland and Vice President JD Vance’s travel. White House statements cited unresolved logistical issues; Swiss authorities confirmed the Bürgenstock meeting would not occur.

Analysts emphasized that four months of disruption had already embedded higher costs. Capital Economics’ Simon MacAdam noted that energy and fertilizer price increases typically reach households with a three-month lag. The World Bank lowered its 2026 global growth forecast to 2.5 percent and raised its inflation projection to 4 percent. Goldman Sachs revised its Brent outlook to an $80 average late this year and $75 in 2027. Europe faces added pressure from low natural-gas storage, while a looming El Niño threatens further food-price gains.

OPEC Secretary General Haitham Al Ghais told CNBC that demand fundamentals remain strong and rejected International Energy Agency forecasts of an impending glut. INTERTANKO managing director Tim Wilkins said owners would move cautiously until mine-sweeping plans and insurance clarity emerge. Central banks have already adjusted: the European Central Bank raised rates last week, and the Federal Reserve lifted its year-end inflation forecast to 3.6 percent while leaving policy unchanged.

Oil prices are expected to trade between $75 and $82 a barrel in the near term, according to Axi analyst Tiago Lacerda, with full normalization dependent on sustained shipping safety and the 60-day truce holding.