Oil prices inched up on Friday after the United States threatened an indefinite naval blockade of Iran, reviving concerns about supply of crude after the previous session’s fall on a weaker outlook for demand and a large build in U.S. stocks.
Brent futures rose 1 cent, or 0.1%, to $87.08 a barrel by 0247 GMT, while U.S. West Texas Intermediate (WTI) crude futures rose 6 cents to $81.31 a barrel.
The benchmarks were on track for weekly rises of about 4% after the prior session’s fall of more than 2%, paring gains following Brent’s six-session rally and a five-session rise for WTI.
“Despite the bearish crude stock data, the broader geopolitical backdrop is preventing a sharper price decline,” Susan Bell, senior vice president for oil commodity markets at Rystad Energy said in a note.
On Thursday, the United States warned that it could maintain a naval blockade of Iran indefinitely and ramp up economic pressure on Tehran as ceasefire talks have stalled.
“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,” Treasury Secretary Scott Bessent told Newsmax’s “Rob Schmitt Tonight” programme in an interview.
The latest U.S. threats come as Iran curbs traffic through the Strait of Hormuz, which carried 20% of the world’s oil before the conflict, driving up fuel prices and putting pressure on President Donald Trump to end a war that is unpopular at home.
The strait is “under the management and control of the Islamic Republic”, however, the recently appointed head of Iran’s Basj paramilitary unit, Hossein Taeb, has said, according to the semi-official Fars news.
The prospect of a longer war constraining supply was offset this week by forecasts from OPEC and the International Energy Agency lowering outlooks for demand growth, while data showed the largest weekly gain in U.S. crude stocks for more than 3-1/2-years.
KCM chief market analyst Tim Waterer said the two forces were acting as counterweights.
“The result is a market that remains supported but struggles to break meaningfully higher while these opposing pressures remain in place.”
Two vessels from the state-owned Abu Dhabi National Oil Company were attacked transiting the Strait of Hormuz on Thursday, said UAE state news agency WAM, an incident the United Arab Emirates government condemned as an Iranian attack.
(Reporting by Mohi Narayan in New Delhi and Helen Clark in Perth; Editing by Sonali Paul and Clarence Fernandez)