- Maritime transport in the Strait of Hormuz remains almost paralyzed after the fighting.
- Tanker traffic was disrupted while shipowners assessed safety risks.
- Hormuz handled about 20% of the world’s oil and gas supply before the war.
Oil prices rose on Friday and were heading for weekly gains on renewed fears of supply disruptions from the key producing region of the Middle East after fresh clashes between the United States and Iran this week reduced shipping in the Strait of Hormuz.
Brent futures were up 19 cents, or 0.25%, at $76.49 a barrel by 0319 GMT. U.S. West Texas Intermediate (WTI) crude oil gained 19 cents, or 0.26%, to $72.27.
For the week, Brent was headed for a gain of about 6% and WTI was headed for a gain of 5%.
“Prices have retreated from mid-week highs, but there is still a substantial risk premium as Hormuz transits are almost at a standstill with no clear signs on when normal reopening might resume,” said Vandana Hari, founder of oil market analytics provider Vanda Insights.
“However, it appears that market confidence in the United States and Iran returning to diplomacy to resolve the issue is limiting the upside,” Hari added.
The Iranian military launched attacks on US military infrastructure in the Gulf states on Thursday following US strikes on Iran’s southern and eastern coastal provinces, further forcing a three-week ceasefire.
Separately, Iranian media reported multiple explosions across southern Iran, including Bushehr, where one of the country’s nuclear plants is located.
The resumption of fighting came on the day Iran buried its slain supreme leader, Ayatollah Ali Khamenei, the culmination of a week of mass funeral processions and demonstrations. Khamenei was assassinated on the first day of the war, February 28.
The resumption of fighting has delayed the full reopening of the Strait of Hormuz, through which about 20% of the world’s daily oil and gas supply passed before the war.
On Thursday, tanker traffic through the strait was almost paralyzed, according to ship tracking data, as shipowners assessed the risk of the latest attacks, which began after Iran hit a Qatari LNG ship leaving the waterway near Oman.
Still, U.S. President Donald Trump said Wednesday that he did not believe the war would restart because of the new fighting and that “whatever happens will end very quickly.”
“Despite the US escalating attacks on military sites in Iran, the market gained some comfort from the Trump administration’s decision to avoid attacking Iran’s energy infrastructure,” said Daniel Hynes, senior commodities strategist at ANZ bank.
“This was helped by comments from President Trump, who said he does not expect a return to full-scale conflict.”
