Oil steadies after US threatens to blockade Iran indefinitely
- Brent futures rose 9 cents, or 0.1%, to $87.16 a barrel
Oil prices edged up after US threats of an indefinite naval blockade and economic pressure on Iran, despite earlier falls from a weaker demand outlook and rising US crude stocks.
- US threats of indefinite naval blockade and economic pressure on Iran.
- Iran's control over the Strait of Hormuz and global oil supply.
- Conflicting pressures on oil prices from supply concerns and demand forecasts.
PERTH: Oil prices inched higher on Friday after the US threatened to maintain a naval blockade of Iran indefinitely, reviving crude supply concerns, after prices fell in the previous session on a weaker global demand outlook.
Brent futures rose 9 cents, or 0.1%, to $87.16 a barrel by 0130 GMT, while US West Texas Intermediate (WTI) crude futures rose 4 cents to $81.29 a barrel.
The two benchmarks fell more than 2% in the prior session, paring gains after a six-session rally for Brent and a five-session rise for WTI, but were on track for weekly rises of around 4%.
The United States on Thursday said it could maintain a naval blockade of Iran indefinitely and would 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 on a country,” US Treasury Secretary Scott Bessent said in an interview on Newsmax’s “Rob Schmitt Tonight” program.
The latest US threats come as Iran continues to limit 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 US President Donald Trump to end a war that is unpopular at home.
The recently appointed head of Iran’s Basj paramilitary unit, Hossein Taeb, said the strait is “under the management and control of the Islamic Republic”, 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 their outlooks for demand growth, while data showed US crude stocks made their largest weekly gain in over three and a half 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,” he said.
Two vessels from the state-owned Abu Dhabi National Oil Company were attacked transiting the strait on Thursday evening, UAE state news agency WAM reported.
The United Arab Emirates government condemned it as an Iranian attack.