Key Highlights

  • Brent crude rose 1.8% to $88.64 per barrel and WTI climbed 2% to $82.89 after the US said its naval blockade of Iranian ports could continue indefinitely
  • Both benchmarks fell 2% in Thursday's session but remain on track for weekly gains of around 4%, following a sustained rally tied to the Hormuz standoff
  • The UAE said Iran attacked two vessels operated by the state-owned Abu Dhabi National Oil Company while they were transiting the strait
  • The International Energy Agency said global oil Demand will fall further than previously expected this year, even as it projects Supply will decline by roughly 4.3 million barrels per day, or about 4%

Oil Rises as US Signals Indefinite Blockade of Iranian Ports

Oil prices rose early Friday after the US said its naval blockade of Iranian ports could continue indefinitely, reviving concerns over energy flows through the Strait of Hormuz. Brent futures, the international benchmark, were 1.8% higher at $88.64 per barrel, while US West Texas Intermediate crude futures climbed 2% to $82.89. Both benchmarks had dipped 2% in Thursday's session but remained on track for weekly gains of around 4%, extending a sustained rally tied to the standoff over the strait.

The upward move followed comments from Treasury Secretary Scott Bessent, who said the US was preparing measures aimed at the economic isolation of Iran that "have never been seen." Bessent's remarks came hours after Defense Secretary Pete Hegseth told reporters that US forces could maintain an indefinite blockade of Iranian ports, framing the standoff as a war of attrition the US military is structurally positioned to win.

UAE Reports Attack on Tankers Transiting the Strait

The renewed warnings followed a statement from the United Arab Emirates on Thursday evening that Iran had attacked two vessels operated by the state-owned Abu Dhabi National Oil Company while they were transiting the strait. The incident adds to a pattern of attacks on commercial shipping in the corridor that has persisted despite periodic diplomatic efforts to de-escalate the conflict.

Crude has continued moving out of the Persian Gulf despite the disruption, with some tankers transiting the strait while running with their transponders switched off to avoid detection. US officials have said as much as 9 million barrels of oil per day are currently passing through the waterway, a figure that has drawn skepticism from independent market trackers monitoring the corridor.

Thursday's Pullback Followed Wright's Flow Estimates

Thursday's session saw prices retreat after Energy Secretary Chris Wright said oil exports passing through the strait are now higher than many independent estimates suggest, a claim that briefly eased supply concerns before Friday's renewed escalation reversed the move. The pullback also coincided with a large build in US crude stockpiles, which added near-term downward pressure on prices even as the underlying geopolitical risk remained unresolved.

IEA Flags Weaker Demand Alongside Steeper Supply Losses

The International Energy Agency said this week that global oil demand is expected to fall further than previously anticipated this year, warning that prolonged conflict and elevated prices are increasingly weighing on consumption. At the same time, the agency said global oil supply is expected to decline by approximately 4.3 million barrels per day, or around 4%, this year, as renewed hostilities in the Middle East threaten to push the global oil market deeper into deficit.

The agency has separately said it does not expect Middle East oil production to return to near pre-conflict levels until early 2027, underscoring the likely duration of the current supply disruption regardless of how the current standoff over the strait is eventually resolved.