Oil prices extended their gains on Friday, heading toward strong weekly increases as renewed concerns over Middle East supply disruptions continued to weigh on global markets following escalating tensions between the United States and Iran.
Brent crude futures rose 29 cents, or 0.38 percent, to $76.59 a barrel by 01:20 GMT, while US West Texas Intermediate (WTI) crude gained 17 cents, or 0.24 percent, to reach $72.25 a barrel.
Brent crude was on track for a weekly gain of around 6 percent, while US crude was expected to rise by approximately 5 percent, supported by market concerns over potential disruptions to energy flows through the Strait of Hormuz.
Analysts said the near-complete slowdown in traffic through the strategic waterway has created a significant risk premium in oil markets, with uncertainty remaining over when normal shipping activity will resume.
“There is still a significant risk premium with the near-total halt to traffic through the Strait of Hormuz and no clear indication of when it will resume,” said Vandana Hari, founder of oil market analysis firm Vanda Insights.
The International Energy Agency (IEA) warned that the latest escalation in US-Iran tensions could affect expectations of a large oil market surplus next year, highlighting the vulnerability of global energy supplies to geopolitical developments.
The Strait of Hormuz remains a critical global energy route, with around 20 percent of the world’s daily oil and gas supplies passing through it before the conflict intensified.
UBS analyst Giovanni Staunovo said the absence of additional US strikes against Iran could ease upward pressure on prices, but reduced flows through the Strait of Hormuz continue to limit any significant decline.
Although tracking data showed some liquefied natural gas tankers had crossed the waterway in recent days, overall shipping activity remained below normal levels.
US President Donald Trump said Wednesday that he did not expect another full-scale war and indicated that any further developments would be resolved quickly. Market analysts said the decision by Washington to avoid targeting Iranian energy infrastructure provided some reassurance to traders.
“Despite the escalation of US attacks on military sites in Iran, the market has drawn some reassurance from the Trump administration’s decision to avoid targeting Iranian energy infrastructure,” said Daniel Hynes, senior commodities analyst at ANZ.
Meanwhile, Russian fuel supplies have also come under pressure after Ukrainian drone attacks forced shutdowns at major oil refineries, reducing gasoline production to an estimated level equivalent to about 65 percent of average seasonal consumption, according to industry sources and Reuters calculations.
Market participants are closely monitoring developments in the Middle East, with supply risks and geopolitical uncertainty expected to remain key drivers of oil prices in the coming days.
