Brent and WTI crude rose Friday, putting oil on track for its first weekly gain in three weeks after a drone struck a tanker exiting the Strait of Hormuz. The attack deepened uncertainty over the waterway's status as the U.S. and Iran remain locked in a standoff, even as OPEC and the IEA cut their demand forecasts for the year.
Drone strike hits tanker exiting Hormuz
An uncrewed aerial vehicle struck a tanker in the Strait of Hormuz as the vessel attempted to exit the waterway, the United Kingdom Maritime Trade Operations agency said Friday. The UKMTO reported the ship sustained minor damage, its crew are safe and accounted for, and no environmental impact was recorded. Still, the agency flagged that ships should take caution when transiting the strait.
The incident kept Brent crude futures up 1.0% at $87.90 a barrel, while WTI crude futures added 1.6% to $82.56 a barrel by 04:57 ET. Both benchmarks were trading up around 5% this week. The effective closure of the Strait of Hormuz has supported prices all year, since roughly a fifth of the world's oil and liquefied natural gas passed through the conduit before the Iran war began in late February.
Washington and Tehran remain at odds over the strait
Iran says it still controls the waterway and has closed it to commercial shipping, but the United States claims it continues to facilitate sailings through the crude oil chokepoint. On Thursday, U.S. Defense Secretary Pete Hegseth said Washington could maintain an ongoing naval blockade of Iranian ports indefinitely, and the continued American naval presence in the Gulf has reportedly caused severe economic damage to Iran already.
Treasury Secretary Scott Bessent has said the U.S. would hit Iran with further measures. According to Investing.com: "measures like have never been seen in the history of economic isolation on a country". This week President Donald Trump suggested the sanctions will eventually force Tehran to accept U.S. demands, including an end to its nuclear program and a full reopening of the strait, though talks with Iran show no sign of restarting soon.
Iran's Parliamentary Committee on Councils has meanwhile agreed on a strategic action plan for the strait, according to media reports, that would include a ban on vessels and equipment owned by the U.S., Israel, and other countries it deems hostile. The standoff keeps geopolitical risk elevated around the waterway.
Demand forecasts cap the rally
Despite the murky supply outlook, the weekly gain has been dulled by both OPEC and the International Energy Agency cutting their demand forecasts for the year. The two bodies warned that sluggish economic growth, high prices, and tight supplies would quash demand in the coming months.
Source: Investing.com
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