Oil prices fell slightly in early trading on Friday, October 16, 2026, but remained on course for weekly gains as rising tensions in the Middle East and declining United States crude inventories heightened concerns over global oil supplies.
Brent crude futures dropped 50 cents, or 0.47 per cent, to $105.42 per barrel, while U.S. West Texas Intermediate (WTI) crude fell 49 cents, or 0.50 per cent, to $97.48 per barrel.
Despite the declines, Brent was on track to gain about 0.5 per cent for the week, while WTI was poised for a 5.91 per cent increase.
WTI prices had risen by more than three per cent on Thursday, October 15, following a significant drawdown in U.S. crude inventories linked to production disruptions caused by a hurricane.
Analysts at ING said uncertainty surrounding the Middle East and the security of oil shipments through the Strait of Hormuz had prompted traders to factor a substantial risk premium into prices.
“Uncertainty in the Middle East and concerns over the sustainability of oil flows through the Strait of Hormuz has the market pricing in a significant risk premium,” the analysts said in a note.
They added that confidence in the oil market was likely to improve only if the United States and Iran reached an agreement that guaranteed uninterrupted crude exports from the region.
Supply concerns have intensified following a rise in attacks around the Strait of Hormuz over the past 10 days. Iran has also escalated its military operations in response to a U.S. blockade of its ports and stricter sanctions imposed last month, raising fears of prolonged disruptions to global energy supplies.
Data from ship-tracking firm Kpler showed that crude oil movements through the Strait of Hormuz averaged 11.62 million barrels per day in the seven days to October 13, significantly below the normal baseline of 17.15 million barrels per day.
Kpler said the increase in Iranian attacks had substantially reduced oil exports from the Gulf, warning that shipping volumes could recover slowly and unevenly without a broader political settlement.
The Strait of Hormuz is a critical route for global oil shipments, making any disruption to maritime traffic through the waterway a major concern for energy markets. Continued uncertainty over regional security is likely to keep supply risks and geopolitical developments in focus among oil traders.
