Oil set for second weekly gain as US ramps up pressure on Iran

Crude oil prices surged on Friday as the United States threatened economic sanctions on Iran's trading partners, raising concerns about potential supply constraints. The benchmark Brent crude futures climbed to $94.39 a barrel, while U.S. West Texas Intermediate crude reached $87.06 a barrel. John Kilduff, a partner at Again Capital, noted that sanctions have historically been effective in influencing Iran's behavior.

Iran warned that any further U.S. threats would result in "devastating" consequences. Although current supply constraints are primarily due to the U.S. naval blockade, increased shipping incidents and retaliation could worsen the situation. Nevertheless, alternative sources such as pipelines, shuttles, U.S. shale, recovering Venezuelan production, and UAE output are helping to mitigate the impact.

The recent peace deal between the U.S. and Iran has expired without renewed talks, and Iranian crude offers to Chinese buyers have decreased as the U.S. blockade reduces Iran's shipments. Disruptions in energy flows through the Strait of Hormuz continue, with only half the usual number of ships passing through the waterway.