Oil prices moved slightly higher on Friday as fresh US warnings of tougher action against Iran raised concerns over global crude supplies, helping the market recover after a sharp fall in the previous session.
Brent crude futures gained 9 cents, or 0.1 per cent, to $87.16 a barrel by 0130 GMT. US West Texas Intermediate crude rose 4 cents to $81.29 a barrel.
Despite Thursday’s decline of more than 2 per cent, both benchmarks remained on course for weekly gains of about 4 per cent after several consecutive sessions of increases.
The latest support for prices came after the United States signalled it was prepared to keep a naval blockade of Iran in place for as long as necessary while stepping up economic pressure on Tehran. The announcement followed stalled ceasefire negotiations and renewed uncertainty over oil flows from the region.
US Treasury Secretary Scott Bessent said more measures would be announced next week, describing them as some of the strongest economic restrictions ever imposed on a country.
The tensions have added to worries over the Strait of Hormuz, a vital shipping route that previously handled around one fifth of global oil supplies. Iran has continued to restrict traffic through the waterway. Hossein Taeb, the newly appointed head of Iran’s Basij paramilitary force, said the strait was under the country’s control, according to Iran’s semi-official Fars news agency.
However, gains in oil prices were capped by concerns over weaker demand. Both OPEC and the International Energy Agency recently lowered their forecasts for global oil demand growth, while US government data showed crude inventories recorded their biggest weekly increase in more than three and a half years.
KCM Trade chief market analyst Tim Waterer said supply risks and softer demand expectations were pulling the market in opposite directions.
He said these competing factors were keeping oil prices supported but preventing a stronger rally.
Meanwhile, two vessels operated by the Abu Dhabi National Oil Company were attacked while passing through the Strait of Hormuz on Thursday evening. The United Arab Emirates blamed Iran for the incident and strongly condemned the attack.
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