Here's a look at what happened in oil markets in the week of Sept. 14-18 and what the focus will be in the days to come.

OVERVIEW: Oil prices were mixed in afternoon European trading as traders evaluate Saudi supply risks and widening risks from the Middle East war. Brent crude, the global oil benchmark, is trading above $104 a barrel, while West Texas Intermediate futures are at around $102 a barrel.

MACRO: Markets are pricing in a more hawkish Federal Reserve after the U.S. central bank raised interest rates at this week's meeting for the first time in three years, while signaling that another hike could follow. The shift comes as the Fed's progress on inflation has stalled, with the war in Iran driving up oil and broader energy prices, threatening to reignite inflationary pressures and complicate the path toward lower rates.

GEOPOLITICAL RISKS: Global oil flows through key shipping routes in the Middle East risk remaining disrupted well into 2027, according to analysts, keeping the geopolitical risk premium high.

Saudi Arabia shut down the East-West Pipeline, which connects the Persian Gulf with the Red Sea, prompting a sharp rise in oil prices at the start of the week. Prices subsequently fell amid expectations that the kingdom could soon restore some flows through the damaged pipeline. However, Saudi Arabia has not provided a timeline for restarting the pipeline, with its energy ministry stating that technical teams are assessing its integrity following attacks on energy infrastructure.

Meanwhile, the security situation across the region remains volatile as Iran-backed Houthi forces in Yemen have also expanded their territorial control.

SUPPLY AND DEMAND: On the supply side, the disruption to Saudi Arabia's East-West Pipeline and lower oil flows through the Strait of Hormuz are creating concerns about reduced global crude supplies. Saudi Arabia's temporary shutdown of the pipeline could potentially remove around 3.5 million-4 million barrels per day from exports if the outage continues, according to Kpler estimates. Meanwhile, the seven-day average of flows through the Strait of Hormuz stood at 10.0 million barrels per day, well below the pre-war level of 17.1 million barrels per day, the firm said. The continued shortfall and large daily swings indicate that oil shipments through the Strait remain disrupted, keeping pressure on global crude supply and increasing uncertainty in the oil market.

WHAT'S NEXT: Looking ahead, developments in the Middle East, particularly around the East-West Pipeline, are likely to remain a key focus for oil markets. Market participants remain cautious about how quickly Saudi Arabia can restore operations, given that the kingdom has not yet provided a firm timeline for the pipeline's restart. Until there is greater clarity, oil prices are likely to remain elevated as inventories at Yanbu, the Red Sea export terminal and endpoint of the East-West Pipeline, continue to be drawn down.

Beyond geopolitical developments, attention will also turn to the economic calendar, with upcoming PMI data, initial jobless claims and consumer sentiment surveys providing further insight into the health of the global economy and potentially influencing expectations for energy demand and broader market conditions.