Week of Israel-Iran fighting lifts oil as supply disruption fears push geopolitical risk premium

[Data analyzing in commodities energy market: the charts and quotes on display. US WTI crude oil price analysis. Stunning price drop for the last 20 years.]
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The top crude oil benchmarks posted solid gains for the week, as escalating hostilities between Israel and Iran and concerns over potential supply disruptions in the Persian Gulf pushed prices higher.

Traders feared a worst-case scenario [https://seekingalpha.com/news/4458162-crude-oil-soars-by-most-in-three-years-as-market-weighs-wide-range-of-middle-east-outcomes] at the start of the week, in which Iran could shock the global economy by cutting off ship traffic through the Strait of Hormuz, keeping the risk premium at a high level even though such an event is considered unlikely, and in any case, the U.S. economy is much less dependent on Persian Gulf oil than in the 1970s.

Israeli strikes have disrupted Iran's domestic energy infrastructure in recent days, but exports from Iran have continued flowing to oil-hungry buyers in China and elsewhere, with Iranian shipments ferried abroad looking as much as 30%-40% higher [https://www.wsj.com/finance/week-of-middle-east-conflict-pushes-oil-prices-higher-85d7deb6] than typical volumes at this time of year, according to Rystad Energy.

Oil futures fell on Friday after the White House said President Trump will decide in the next two weeks whether the U.S. will get involved in the Israel-Iran air war, and the U.S. Treasury Department issued new sanctions on Iran, which some analysts took as a signal [https://www.reuters.com/world/middle-east/oil-set-rise-third-week-escalating-israel-iran-conflict-2025-06-20/] the Trump administration may be trying to resolve the dispute in ways other than conflict.

"Although a major escalation is yet to occur, risks to supply from the region remain high, still hinging upon the potential for U.S. involvement," Tradu.com senior analyst Russell Shor said in a note. "The short-term bias is still tilted upward amid ongoing Middle East tensions, and the market will be watching crude intently until there are clear signs of de-escalation."

Brent crude fell sharply on Friday while WTI ended only slightly lower after the Juneteenth holiday in the U.S. caused a lag in updates, with Brent's sharp move in the previous session widening the discrepancy [https://www.wsj.com/business/energy-oil/oil-futures-diverge-on-u-s-holiday-price-lag-contract-expiration-f0db150d] between the two benchmarks more than usual.

The Brent-WTI divergence also was influenced by the expiration of the July WTI contract on Friday, prompting traders to roll positions into the more actively traded August contract.

Both benchmarks rose for the third straight week, with front-month Nymex crude (CL1:COM [https://seekingalpha.com/symbol/CL1:COM]) for July delivery closing +2.7% to $74.93/bbl and front-month August Brent crude (CO1:COM [https://seekingalpha.com/symbol/CO1:COM]) ending +3.7% to $77.01/bbl this week; on Friday, WTI and Brent settled lower by 0.3% and 2.3%, respectively.

Front-month Nymex natural gas (NG1:COM [https://seekingalpha.com/symbol/NG1:COM]) for July delivery finished +7.4% at $3.847/MMBtu this week, primarily due to expectations for hot weather forecast for much of the U.S. over the next two weeks, especially in the East Coast, where many record highs likely will be broken.

The Israel-Iran conflict has boosted global diesel prices, with gains outstripping the jump in crude prices, highlighting the vulnerability [https://www.reuters.com/markets/commodities/mideast-conflict-turbocharges-diesel-prices-squeezing-europe-2025-06-19/] of diesel-heavy European consumers.

U.S. ultra-low sulfur diesel futures (HO1:COM [https://seekingalpha.com/symbol/HO1:COM]) surged for the third straight week, with the front-month July Nymex contract +7.7% to $2.5418/gal this week, while front-month gasoline (XB1:COM [https://seekingalpha.com/symbol/XB1:COM]) for July delivery +4.6% to $2.3295/gal for the week.

ETFs: (NYSEARCA:USO [https://seekingalpha.com/symbol/USO]), (BNO [https://seekingalpha.com/symbol/BNO]), (UCO [https://seekingalpha.com/symbol/UCO]), (SCO [https://seekingalpha.com/symbol/SCO]), (USL [https://seekingalpha.com/symbol/USL]), (DBO [https://seekingalpha.com/symbol/DBO]), (DRIP [https://seekingalpha.com/symbol/DRIP]), (GUSH [https://seekingalpha.com/symbol/GUSH]), (USOI [https://seekingalpha.com/symbol/USOI]), (UNG [https://seekingalpha.com/symbol/UNG]), (BOIL [https://seekingalpha.com/symbol/BOIL]), (KOLD [https://seekingalpha.com/symbol/KOLD]), (UNL [https://seekingalpha.com/symbol/UNL]), (FCG [https://seekingalpha.com/symbol/FCG])

Energy stocks, as represented by the Energy Select Sector SPDR Fund (NYSEARCA:XLE [https://seekingalpha.com/symbol/XLE]), rose 1% this week.

Top 20 gainers in energy and natural resources in the past 5 days: Houston American Energy (HUSA [https://seekingalpha.com/symbol/HUSA]) +107.3%, Robin Energy (RBNE [https://seekingalpha.com/symbol/RBNE]) +82.7%, Nine Energy Services (NINE [https://seekingalpha.com/symbol/NINE]) +74.5%, Geospace Technologies (GEOS [https://seekingalpha.com/symbol/GEOS]) +73.3%, Battalion Oil (BATL [https://seekingalpha.com/symbol/BATL]) +69.9%, Critical Metals (CRML [https://seekingalpha.com/symbol/CRML]) +54.6%, Dawson Geophysical (DWSN [https://seekingalpha.com/symbol/DWSN]) +50.3%, Indonesia Energy (INDO [https://seekingalpha.com/symbol/INDO]) +42.9%, Perma-Pipe International (PPIH [https://seekingalpha.com/symbol/PPIH]) +42%, TMC the metals company (TMC [https://seekingalpha.com/symbol/TMC]) +36.7%, Mexco Energy (MXC [https://seekingalpha.com/symbol/MXC]) +34.4%, Marine Petroleum Trust (MARPS [https://seekingalpha.com/symbol/MARPS]) +30.6%, MP Materials (MP [https://seekingalpha.com/symbol/MP]) +29.2%, Green Plains (GPRE [https://seekingalpha.com/symbol/GPRE]) +21.9%, Fluence Energy (FLNC [https://seekingalpha.com/symbol/FLNC]) +20.2%, Centrus Energy (LEU [https://seekingalpha.com/symbol/LEU]) +19.9%, Comstock Resources (CRK [https://seekingalpha.com/symbol/CRK]) +19%, Mesa Royalty Trust (MTR [https://seekingalpha.com/symbol/MTR]) +17.4%, Darling Ingredients (DAR [https://seekingalpha.com/symbol/DAR]) +17.1%, Par Pacific (PARR [https://seekingalpha.com/symbol/PARR]) +16.3%.

Top 10 decliners in energy and natural resources in the past 5 days: Top Ships (TOPS [https://seekingalpha.com/symbol/TOPS]) -40.4%, Sunrun (RUN [https://seekingalpha.com/symbol/RUN]) -26.4%, New Fortress Energy (NFE [https://seekingalpha.com/symbol/NFE]) -25.4%, Brenmiller Energy (BNRG [https://seekingalpha.com/symbol/BNRG]) -25.3%, Solaredge Technologies (SEDG [https://seekingalpha.com/symbol/SEDG]) -21.4%, Enphase Energy (ENPH [https://seekingalpha.com/symbol/ENPH]) -19.8%, VivoPower International (VVPR [https://seekingalpha.com/symbol/VVPR]) -19.1%, Eco Wave Power (WAVE [https://seekingalpha.com/symbol/WAVE]) -17.6%, Zeo Energy (ZEO [https://seekingalpha.com/symbol/ZEO]) -16.9%, USA Rare Earth (UAR) -16.4%.

Source: Barchart.com

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