Oil prices on pace for weekly gain amid Hormuz supply uncertainty

Oil prices edged higher on Friday, inching closer to a weekly increase for the first time in three months, as uncertainty surrounding the Strait of Hormuz continued to impact supply flows. Brent crude futures, the global benchmark, rose 1.0% to $87.90 a barrel, while U.S. West Texas Intermediate futures climbed 1.6% to $82.56 a barrel.

Both were trading up around 5% for the week. The Strait of Hormuz, a crucial chokepoint where about a fifth of global oil and liquefied natural gas pass through, has been a key driver of oil prices this year. A tanker in the Strait was struck by an unmanned aerial vehicle while attempting to exit, though there was no environmental impact and the crew was safe, according to the United Kingdom Maritime Trade Operations agency.

However, the agency advised caution for ships transiting the strait. The incident came amid ongoing tensions between the U.S. and Iran over the waterway, with Iran claiming full control and the U.S. maintaining it continues to allow commercial shipping. U.S. Defense Secretary Pete Hegseth suggested the U.S. could keep a naval blockade of Iranian ports indefinitely, while Treasury Secretary Scott Bessent announced new economic measures against Iran.

President Donald Trump has hinted that sanctions will eventually force Tehran to accept U.S. demands, including an end to its nuclear program and the reopening of the Strait. Despite these developments, crude's weekly gains were tempered by cuts in demand forecasts by OPEC and the International Energy Agency, who warned that economic slowdown, high prices, and tight supplies would dampen demand.