Oil prices rose Friday after the United States said it could keep a naval blockade of Iran running indefinitely and warned of unprecedented new economic pressure on Tehran. The gains reverse part of Thursday's drop, which came after OPEC and the IEA cut demand forecasts and U.S. crude stocks posted their biggest weekly build in more than three and a half years.
Brent futures rose 90 cents, or 1.03%, to $87.97 a barrel by 0653 GMT on Friday, while U.S. West Texas Intermediate crude gained 91 cents to $82.16 a barrel. Both benchmarks were on track for weekly gains of about 4%, clawing back part of the prior session's fall of more than 2%.
Washington signals a longer squeeze
The rebound followed U.S. warnings on Thursday that it could maintain the naval blockade of Iran indefinitely and increase economic pressure on Tehran as ceasefire talks have stalled. Defense Secretary Pete Hegseth said the Navy can keep the blockade running indefinitely, rotating ships in and out of the region. Treasury Secretary Scott Bessent said Washington will apply economic measures against Iran unlike anything seen before, without detailing them further.
Trump has also threatened 25% tariffs on any country buying Iranian goods or services, a move that could hit China, Iran's largest trading partner. The USS George Washington strike group departed Vietnam on August 12 to relieve the USS Abraham Lincoln, which has been deployed in the Middle East for more than 250 days.
Supply risk offsets a weaker demand outlook
Iran's curbs on flows through the Strait of Hormuz, which carried 20% of the world's oil before the conflict, keep driving up fuel prices. Two vessels from the state-owned Abu Dhabi National Oil Company were attacked while transiting the strait on Thursday, an incident the UAE government condemned as an Iranian attack.
Yet the prospect of a longer war has been offset this week by OPEC and the International Energy Agency lowering their demand growth outlooks. Data this week also showed the largest weekly gain in U.S. crude oil stocks in more than three and a half years. Rystad Energy's Susan Bell said the geopolitical backdrop is preventing a sharper price decline despite the bearish stock data. Traders in the crude oil market are now weighing that supply overhang against a blockade Washington says it is prepared to sustain indefinitely.
Sources: Investing.com, CNBC, CNBC
Trading involves risk.
Risk Disclaimer
