Oil prices edged higher on Friday as the United States threatened to keep its naval blockade of Iran in place indefinitely, reviving concerns over crude supplies even as weaker demand expectations capped gains.
Brent crude futures rose 9 cents, or 0.1%, to US$87.16 a barrel by 0130 GMT, while US West Texas Intermediate (WTI) crude futures gained 4 cents to US$81.29 a barrel.
Both benchmarks had dropped more than 2% in the previous session, ending a six-session winning streak for Brent and a five-session run for WTI. Despite the pullback, both contracts remained on track for weekly gains of around 4%.
The latest move came after the United States said on Thursday it could maintain its naval blockade of Iran indefinitely while stepping up economic pressure on Tehran as ceasefire negotiations stalled.
“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 on a country,” US Treasury Secretary Scott Bessent said in an interview on Newsmax’s “Rob Schmitt Tonight” programme.
The blockade threat comes as Iran continues to restrict traffic through the Strait of Hormuz, a crucial oil transit route that carried around 20% of the world’s oil before the conflict.
Iran’s newly appointed head of the Basj paramilitary unit, Hossein Taeb, said the strait is “under the management and control of the Islamic Republic”, according to semi-official Fars news.
Adding to the supply concerns, two vessels belonging to Abu Dhabi National Oil Company were attacked while transiting the strait on Thursday evening, according to UAE state news agency WAM. The UAE government condemned the incident as an Iranian attack.
However, concerns over prolonged supply disruptions have been partly offset by a weaker demand outlook.
Both OPEC and the International Energy Agency lowered their forecasts for oil demand growth this week, while US crude inventories recorded their largest weekly increase in more than three and a half years.
KCM chief market analyst Tim Waterer said the competing forces were keeping the oil market supported but limiting further gains.
“The result is a market that remains supported but struggles to break meaningfully higher while these opposing pressures remain in place,” he said.
