Key TakeawaysWTI crude poised for 10% weekly surge while Brent approaches 7% gains, reaching six-week peaksMilitary confrontations between Washington and Tehran intensified this week, affecting Kuwait, Bahrain, and JordanVessel traffic through the Strait of Hormuz collapsed to merely 4 ships on Thursday versus a 10-day average of 15American diesel costs reached unprecedented levels, fueling inflationary pressures and climbing bond yieldsCitigroup boosted third-quarter Brent projection to $86/barrel; ANZ anticipates near-term prices at $95Crude oil markets experienced modest declines on Friday yet remained positioned for one of their strongest weekly showings in recent months, as escalating U.S.-Iran hostilities continue rattling global energy traders.By Friday morning, Brent crude hovered near $95.15 per barrel, registering a 0.4% intraday decline. West Texas Intermediate dropped 0.6% to $90.77. However, looking at the broader picture, Brent posted a 6.6% weekly advance while WTI surged 8.8%, marking its strongest seven-day performance since mid-July.Brent Crude Oil Last Day Financial Futures (BZ=F)Washington and Tehran have now been engaged in military confrontations for seven months. Recent days witnessed some of the most intense exchanges since July, with American forces targeting sites near the critical Strait of Hormuz. Iranian forces retaliated with missile and drone strikes against U.S. and coalition installations across Kuwait, Bahrain, and Jordan.Reports indicate one American strike impacted a location where a wedding celebration was underway in southern Iran, resulting in civilian casualties. Iranian officials strongly denounced the incident.Critical Waterway Sees Dramatic Traffic ReductionAs the planet’s most vital oil transit point, the Strait of Hormuz has faced intensified Iranian shipping restrictions following the recent military escalation. Iran has expanded its Strait of Hormuz shipping blacklist to 56 vessels, following the latest U.S. attacks. A senior Iranian official is vowing an “asymmetrical and multi-layered” response.Gulf tankers appear to be facing tighter restrictions, while Iraqi commercial… pic.twitter.com/9QnEQe2kPu— Mario Nawfal (@MarioNawfal) September 4, 2026Thursday saw merely four commercial cargo vessels navigate the strait, a stark contrast to the approximately 15 ships that typically pass through based on 10-day averages. This significant decline underscores persistent disruption, contradicting U.S. administration assertions that maritime traffic has largely normalized.Maritime tracking services and independent energy consultants maintain that substantial interruptions persist. The discrepancy between official rhetoric and observable reality has amplified market volatility.Vice President JD Vance stated Thursday that Washington would refuse diplomatic engagement with Tehran unless Iranian attacks on international shipping cease immediately.Diesel Markets Reach Historic PeakAmerican diesel markets climbed to unprecedented price levels this week. Industry experts attribute this surge partially to crude supply constraints, compounded by continued Ukrainian strikes targeting Russian refining infrastructure.“Diesel impacts every economic sector,” noted Claudio Galimberti, Rystad Energy’s chief economist. He emphasized that elevated diesel costs are amplifying inflation expectations, consequently driving upward pressure on U.S. Treasury yields.The dramatic energy price escalation has prompted warnings regarding potential severe economic slowdown risks globally.According to Energy Information Administration data, U.S. commercial crude stockpiles decreased to 424.5 million barrels during the week concluded August 28, declining from 428.9 million barrels recorded the prior week.Market observers anticipate OPEC+ will maintain its October production strategy when convening Sunday. The cartel recently completed reversing one phase of output reductions, though Hormuz-related supply disruptions have muddied the effects of those policy adjustments.Citigroup revised its third-quarter Brent average projection upward to $86 per barrel from $80, citing slower-than-anticipated Strait reopening. ANZ elevated its near-term Brent outlook to $95, warning of additional upside potential should hostilities intensify.Iraqi oil shipments increased during August to approximately 2.34 million barrels daily, rising from July’s 1.35 million.The post Crude Oil Surges Toward Six-Week Peak Amid U.S.-Iran Tensions in Hormuz Strait appeared first on Blockonomi.