By COMFORT OGBONNA
Oil prices climbed on Friday and were headed for weekly gains as the United States threatened to maintain an indefinite naval blockade of Iran, increasing concerns about disruptions to crude supplies from the Middle East.
Brent crude futures rose $1.43, or 1.64%, to $88.50 a barrel by 0810 GMT, while U.S. West Texas Intermediate crude gained $1.56, or 1.92%, to $82.81 a barrel.
The gains came as investors assessed the possibility that tensions between the United States and Iran could further disrupt oil shipments through the Strait of Hormuz, one of the world’s most important energy corridors.
The latest U.S. threats have raised concerns that the conflict could continue for longer than previously expected, reducing the prospect of a quick return to normal shipping and oil flows through the region.
Bjarne Schieldrop of SEB Research said the prospect of a prolonged confrontation was contributing to higher oil prices because markets were beginning to anticipate a more extended period of disruption.
The United States said Thursday that it could maintain a naval blockade of Iran indefinitely while increasing economic pressure on Tehran. The warning came as efforts to reach a ceasefire remained stalled.
U.S. Treasury Secretary Scott Bessent also warned that Washington was preparing additional measures against Iran, signaling that further economic restrictions could be announced in the coming days.
The prospect of continued restrictions has added to uncertainty surrounding the movement of oil through the Strait of Hormuz.
The waterway is particularly important to global energy markets. Before the current conflict began in late February, roughly one-fifth of the world’s daily oil and liquefied natural gas supplies passed through the strait.
Any sustained disruption could therefore have consequences well beyond the Middle East, potentially affecting crude prices, fuel costs and energy markets around the world.
Shipping traffic through the strait declined toward the end of the week, falling below the monthly average as Iran and the United States issued competing claims over control of the strategic waterway.
The situation became more tense Thursday after two vessels operated by Abu Dhabi National Oil Co. were attacked while traveling through the Strait of Hormuz. The United Arab Emirates government condemned the incident and attributed the attack to Iran.
No injuries were reported, but the incident added to concerns among shipping companies and energy traders about the risks of moving cargo through the waterway.
Higher oil prices could provide some relief to producers but create challenges for consumers and economies that rely heavily on imported energy. Prolonged supply disruptions can increase the cost of gasoline, diesel, transportation and industrial production.
The market’s reaction has been tempered, however, by signs that global oil demand may be weaker than previously expected.
Recent forecasts from major energy organizations have pointed to slower growth in oil consumption this year. At the same time, U.S. crude inventories recorded their largest weekly increase in more than three and a half years, indicating that supplies remain relatively comfortable in the world’s largest oil-consuming economy.
The increase in inventories could limit the extent of the price rally if the supply disruption does not become significantly worse.
Norbert Rucker, head of economics and next-generation research at Julius Baer, said recent inventory data suggested that oil storage levels were holding up better than anticipated, a development that could put downward pressure on prices.
That creates a delicate balance for the oil market.
On one side, geopolitical tensions around Iran and the Strait of Hormuz are increasing the risk of supply disruptions and supporting prices. On the other, weaker demand expectations and rising inventories are providing a counterweight.
The market is therefore likely to remain highly sensitive to developments in the Middle East.
Any evidence that shipping through the Strait of Hormuz is returning to normal could ease concerns and push prices lower, particularly if inventories continue to rise and demand growth remains weak.
Conversely, further attacks on vessels, a prolonged blockade or additional restrictions on Iranian oil exports could lead to another sharp increase in crude prices as traders factor in the possibility of a deeper supply shortage.
For now, investors are watching both the geopolitical situation and the underlying supply-and-demand balance.
The immediate focus remains on whether the latest U.S. threats lead to further disruptions in Iranian oil exports and shipping through the Strait of Hormuz.
With the waterway carrying such a significant share of global energy supplies, any prolonged interruption could have consequences for oil prices and the broader global economy.
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