Oil steadies after US threatens indefinite blockade of Iran
Oil prices inched up on Friday after the United States threatened an indefinite naval blockade of Iran, reviving concerns about the supply of crude after the previous session's fall on a weaker outlook for demand and a large build in U.S. stocks.
Oil prices stabilized on Friday after the United States announced an indefinite naval blockade of Iran, sparking concerns over crude supply following a weaker demand outlook and a significant buildup in U.S. inventories. Brent futures climbed 1 cent, or 0.1%, to $87.08 a barrel, while U.S. West Texas Intermediate (WTI) crude futures increased 6 cents to $81.31 a barrel.
The benchmarks were poised for weekly gains of around 4% after the previous session's decline of over 2%, reducing earlier gains from Brent's six-session rally and a five-session rise for WTI. "Despite bearish crude stock data, the broader geopolitical backdrop is preventing a sharper price decline," said Susan Bell, senior vice president for oil commodity markets at Rystad Energy.
On Thursday, the United States threatened to maintain the naval blockade of Iran indefinitely and escalate economic pressure on Tehran as ceasefire talks stalled. Treasury Secretary Scott Bessent told Newsmax's "Rob Schmitt Tonight" program, "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 of a country."
Iran has restricted traffic through the Strait of Hormuz, which accounted for 20% of global oil before the conflict, raising fuel prices and putting pressure on President Donald Trump to end the unpopular war. The strait is under the control of the Islamic Republic, according to the newly appointed head of Iran's Basj paramilitary unit, Hossein Taeb.
The prospect of an extended war constraining supply was balanced this week by forecasts from OPEC and the International Energy Agency lowering demand growth outlooks, while data revealed the largest weekly increase in U.S. crude stocks in more than three and a half years. Two vessels from the state-owned Abu Dhabi National Oil Company were attacked while passing through the Strait of Hormuz on Thursday, a UAE state news agency reported, condemning the incident as an Iranian attack.
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