Oil prices fell slightly on Friday, but were on track for a second weekly rise as the stalemated U.S.-Iran war continues to disrupt supply from the key Middle East producing region.
Brent crude futures fell 23 cents, or 0.3%, to $93.55 a barrel by 0142 GMT, after climbing 2.4% in the previous session. U.S. West Texas Intermediate crude futures slipped 33 cents, or 0.4%, to $86.50 a barrel, after rising 2.3% in the prior session.
During the previous five days of gains, Brent gained more than 7% and WTI climbed more than 8%, reaching their highest since July 24.
Prices have increased on concerns the inconclusive state of the U.S.-Israeli war on Iran will mean the continued curtailment of supply from major oil producers such as Saudi Arabia, Iraq, the United Arab Emirates and Kuwait.
The earlier peace deal between them expired this week with no effort by either side to restart talks, and U.S. President Donald Trump threatened economic retaliation against nations supporting Iran.
“Both sides are dug in but lacking the luxury of time to play the waiting game, against a backdrop of crude prices grinding unerringly higher,” IG analyst Tony Sycamore said on Friday.
BMI, a unit of Fitch Solutions, said on Friday it will review its Brent price outlook this month, adding that risks to the outlook are “tilted to the upside.”
“Exports are already under considerable pressure, because of the twin disruptions in play in the Strait of Hormuz due to the Iranian shut-in of the strait and the U.S. naval blockade on Iran, and the Red Sea due to the Houthi embargo,” BMI said.
Thousands of people have been killed in the Iran war, which began on February 28 when the U.S. and Israel launched military strikes on Iran.
Seven commodity ships sailed along the Strait of Hormuz on Thursday, just half the previous day’s tally, data from ship-tracker Kpler showed. Prior to the Iran war, about one-fifth of global consumption moved through the waterway.
On Wednesday evening, Trump threatened “economic warfare and isolation on an unprecedented scale” against Tehran, warning of consequences for any country that provided “any type of lifeline to Iran”.
This week, the UAE suspended all financial and economic transactions with Iran until further notice, highlighting the fraught ties between the major Gulf Arab oil producer and Tehran.
(Reporting by Sudarshan Varadhan; Editing by Christian Schmollinger and Jamie Freed)