Crude oil prices were on course for a weekly gain today as hostilities between the United States and Iran flared up again earlier in the week.At the time of writing, Brent crude was trading at $76.60 per barrel, with West Texas Intermediate at $72.37 per barrel. The increase was quite modest compared to the price slide from the last four weeks, which brought benchmarks down to pre-war levels, and even lower.The modest rise suggests the market is still dominated by the perception of ample supply following numerous reports about Persian Gulf exporters rushing to get their barrels out of tanks and on tankers, to be delivered to buyers, discounting the crude to get it out more quickly.“Prices have backed off the mid-week highs, but there is still a substantial risk premium as Hormuz transits are back to a near-standstill with no clear signs on when normal reopening might resume,” energy analyst Vandana Hari said, as quoted by Reuters. “However, it looks like market confidence in the U.S. and Iran returning to diplomacy to resolve the issue is capping the upside,” she added.It appears the conviction that the U.S. and Iran will eventually agree on a peace deal is so strong that even President Trump’s declaration that the ceasefire is over and the return of U.S. sanctions on Iranian crude could not shake it, limiting price gains.“Vessels transiting the Strait of Hormuz remain well below pre-war levels,” ING commodity strategist Warren Patterson said on Thursday. “And recent developments show that safe passage of vessels is still an issue facing the market,” he added, noting that even with alternative routes for oil and the relaxation of Iran’s grip on Hormuz, oil flows out of the Middle East have been averaging 14 million barrels daily, down from 20 million bpd before the war started.By Irina Slav for Oilprice.comMore Top Reads From Oilprice.comU.S. LNG Exporter Reaps Windfall as Middle East Turmoil Drives Fees HigherOil Prices Jump After Iran Attacks Commercial VesselsUS Crude Oil, Product Inventories Fall Even As Hormuz Traffic Begins to Flow