Oil climbs as tanker attacks and US-Iran tensions rattle Hormuz
Crude prices rose after tanker attacks near Hormuz and US-Iran rhetoric. Shipping traffic fell, while Russian exports were also disrupted.
Crude oil prices rose on Friday as fresh attacks on tankers and escalating rhetoric between Washington and Tehran raised concerns about supply from the Middle East.
Brent futures were up 80 cents, or 0.92%, to $87.87 a barrel, while US West Texas Intermediate crude gained 43 cents, or 0.53%, to $81.69 a barrel. Both benchmarks were on track for weekly gains of over 4%.
The jump followed an announcement by the United States that it could maintain a naval blockade of Iran indefinitely and intensify economic pressure, signalling little hope for a near-term resolution to the standoff.
"Watch this space for more announcements coming next week because we are going to apply measures like have never been seen in the history of economic isolation of a country," Treasury Secretary Scott Bessent said.
Shipping traffic through the Strait of Hormuz, which normally handles about one-fifth of global oil and liquefied natural gas supplies, has fallen below the monthly average as both sides made rival claims over control of the waterway.
Adding to the pressure, the United Arab Emirates' state news agency WAM reported that two vessels belonging to the state-owned Abu Dhabi National Oil Company were attacked while transiting the strait on Thursday. The UAE government condemned the incident as an Iranian attack.
"That's the headline that pushed up prices: Tankers attacked," said Phil Flynn, senior analyst at Price Futures Group.
Separately, crude exports from Russia's Sheskharis terminal at the Black Sea port of Novorossiysk were suspended on Friday following a drone attack, according to three sources familiar with the matter.
Despite the supply disruptions, some analysts pointed to signs of easing pressure. OPEC forecasts indicated weaker demand growth, and US crude inventories posted their largest weekly increase in more than three and a half years.
"Storage is holding up much better than feared, which should pull oil prices lower," said Norbert Rucker, head of economics and next generation research at Julius Baer.