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

Crude oil futures rose over $1 per barrel on Friday due to tanker attacks and the absence of a peace agreement between the U.S. and Iran. Brent futures closed at $88.52 per barrel, up 1.45%, while U.S. West Texas Intermediate crude futures finished at $82.40, up 1.15%. Analysts expect both to see weekly gains of 6.0% and 5.4%, respectively.

The rally is attributed to new tanker attacks and the lack of progress on a cease-fire agreement. Andrew Lipow, president of Lipow Oil Associates, noted that the U.S. could maintain an indefinite naval blockade of Iran, which may lead to even higher prices for consumers. The Strait of Hormuz, through which 20% of global oil supply passes, saw reduced shipping traffic due to the ongoing tensions.

Some Middle Eastern supplies, such as Russian crude exports from the Novorossiysk port, have also been disrupted by recent attacks. While crude prices appear strong, storage levels and U.S. inventories suggest prices may not stay at these elevated levels for long.