Oil set for weekly gains after US threatens indefinite blockade of Iran

Crude oil futures experienced a significant increase on Friday, climbing above $1 per barrel due to tanker attacks and the absence of progress in an Iran peace agreement. Brent futures settled at $88.52 a barrel, up $1.45 or 1.67 percent, while U.S. West Texas Intermediate crude futures closed at $82.40, up $1.15 or 1.42 percent.

According to Andrew Lipow, president of Lipow Oil Associates, the market is anticipating a rally into the weekend after new attacks on tankers and the lack of a cease-fire agreement. The strait of Hormuz, through which 20 percent of global oil supply passes, could face a potential chokepoint, pushing oil prices to around $80 a barrel; however, diesel and gasoline prices are soaring to $180 and $130 respectively, affecting consumers.

U.S. Treasury Secretary Scott Bessent warned of indefinite naval blockades and unprecedented economic isolation measures against Iran, following stalled ceasefire talks. Shipping traffic through the strait decreased below the monthly average as tensions escalated between the U.S. and Iran, with attacks on two vessels from the Abu Dhabi National Oil Company on Thursday.

The attacks, condemned by the UAE, further fueled the price surge. Russia's Sheskharis terminal experienced a drone attack, suspending crude oil exports. Despite weak demand growth and a substantial increase in U.S. crude inventories, the International Energy Agency and U.S. Energy Information Administration's forecasts suggest oil prices may still decline in the coming weeks.