Oil jumps over $1 as tanker attacks rattle Strait of Hormuz

Crude oil futures climbed more than $1 a barrel on Friday, driven by fresh attacks on tankers in the Strait of Hormuz and the absence of any breakthrough in diplomatic efforts between Washington and Tehran.

Brent crude settled at $88.52 a barrel, up $1.45, or 1.67%. US West Texas Intermediate crude finished at $82.40, up $1.15, or 1.42%. Both benchmarks were on track for weekly gains of roughly 6% and 5.4%, respectively.

Market analysts said the rally was fueled by headlines of vessels being struck in the strait, a critical chokepoint for about one-fifth of global oil and liquefied natural gas supplies. The United Arab Emirates' state news agency reported that two tankers operated by the Abu Dhabi National Oil Company were attacked while transiting the waterway on Thursday, an incident the UAE government condemned as an Iranian attack.

Adding to supply concerns, crude exports from Russia's Sheskharis terminal at the Black Sea port of Novorossiysk were suspended on Friday following a drone attack, according to sources familiar with the matter.

On the diplomatic front, the US said it could maintain a naval blockade of Iran indefinitely and intensify economic pressure in response to stalled ceasefire talks. Treasury Secretary Scott Bessent signaled further measures, saying "announcements coming next week" would include steps "never been seen in the history of economic isolation of a country."

Shipping traffic through the Strait of Hormuz has fallen below the monthly average as both sides make rival claims over control of the waterway. Before US-Israeli attacks on Iran began in late February, the strait handled roughly 20% of global oil and LNG flows.

While supply disruptions dominate headlines, some analysts pointed to offsetting factors. OPEC forecasts suggest weaker demand growth, and US crude inventories posted their largest weekly build in more than three and a half years. One economist noted that storage levels are "holding up much better than feared," which could pull prices lower in the longer term.

Refined product prices remain a concern for consumers, with one analyst noting that while crude sits near $80 a barrel, diesel prices are around $180 and gasoline near $130, hitting end-users directly.