Oil prices today: Crude edges higher as US-Iran tensions revive supply concerns
Oil prices edged higher on Friday as the United States threatened to maintain a naval blockade of Iran indefinitely, renewing concerns over crude supplies even as weaker demand forecasts and rising US inventories limited gains.Brent crude futures rose 9 cents, or 0.1%, to $87.16 a barrel by 0130 GMT, while US West Texas Intermediate (WTI) crude gained 4 cents to $81.29 a barrel.The gains came after both benchmarks fell more than 2% in the previous session.Despite Thursday’s decline, Brent was on track for a weekly gain of around 4%, while WTI was also headed for a rise of about 4%.
US threatens prolonged blockade of Iran
Oil markets remained focused on the possibility of a prolonged conflict between the US and Iran and its impact on crude supplies.The United States said on Thursday that it could maintain a naval blockade of Iran indefinitely and would increase economic pressure on Tehran as ceasefire talks have stalled.US treasury secretary Scott Bessent warned of further measures against Iran.“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 on a country,” Bessent said in an interview with Newsmax’s Rob Schmitt Tonight programme.The latest US position has heightened concerns that disruptions to oil flows through the region could persist.
Strait of Hormuz remains key to oil supply
Iran has continued to restrict traffic through the Strait of Hormuz, a major global oil shipping route that carried about 20% of the world’s oil before the conflict, according to Reuters.Iran’s newly appointed head of the Basij paramilitary force, Hossein Taeb, said the strait was “under the management and control of the Islamic Republic”, according to Iran’s semi-official Fars news agency.The supply concerns were reinforced after two vessels belonging to state-owned Abu Dhabi National Oil Company were attacked while transiting the strait on Thursday evening, according to the UAE state news agency WAM.The UAE government described the incident as an Iranian attack.
Demand concerns limit oil price gains
Concerns over supply disruptions have been partly offset by a weaker outlook for global oil demand.Opec and the International Energy Agency lowered their forecasts for demand growth this week, while US crude inventories recorded their largest weekly increase in more than three and a half years.Tim Waterer, chief market analyst at KCM, said the conflicting supply and demand factors were keeping the market from making a decisive move higher.“The result is a market that remains supported but struggles to break meaningfully higher while these opposing pressures remain in place,” he said, as cited by Reuters.For consumers and businesses, the direction of crude prices will therefore continue to depend largely on whether geopolitical supply risks outweigh concerns about weaker global demand and rising inventories.
