Oil prices moved higher on Friday and remained on course for their first weekly advance in three weeks, as a fresh attack on a vessel in the Strait of Hormuz added to uncertainty over the movement of crude and liquefied natural gas through the key shipping route.
Brent crude futures rose 1.0% to $87.90 a barrel, while U.S. West Texas Intermediate crude futures gained 1.6% to $82.56 by 04:57 ET. Both benchmarks were up around 5% for the week.
The effective closure of the Strait of Hormuz has provided sustained support to oil prices this year. Before the Iran war began in late February, roughly one-fifth of global oil and LNG flows passed through the narrow waterway.
Vessel attack adds to shipping concerns
The United Kingdom Maritime Trade Operations agency said on Friday that a tanker attempting to leave the Strait of Hormuz was struck by an uncrewed aerial vehicle.
According to the UKMTO, the vessel suffered minor damage, while all crew members were reported safe and accounted for. No environmental damage was identified.
The agency nevertheless advised vessels operating in the area to exercise caution when navigating the strait.
The latest incident comes as Washington and Tehran remain divided over control of the waterway. Iran has maintained that it continues to control the strait and has closed it to commercial shipping, while the U.S. says it is still helping vessels to transit the route.
Washington steps up pressure on Iran
U.S. Defense Secretary Pete Hegseth said on Thursday that Washington could maintain a naval blockade of Iranian ports indefinitely.
The continued presence of U.S. naval forces in the Gulf has reportedly already placed substantial economic pressure on Iran.
Treasury Secretary Scott Bessent also said the U.S. would impose “measures like have never been seen in the history of economic isolation on a country.”
President Donald Trump has argued that sanctions will ultimately force Tehran to accept Washington’s demands, including ending its nuclear programme and fully reopening the Strait of Hormuz.
Although U.S. weapons stockpiles have reportedly been reduced and negotiations with Iran have yet to restart, Trump said a “totally broke” Iran would eventually yield to financial pressure.
Iran considers tighter restrictions on hostile states
Iran’s Parliamentary Committee on Councils has reportedly approved a strategic action plan covering management of the Strait of Hormuz.
One element of the proposal would prohibit vessels and equipment owned by the U.S., Israel and other “hostile countries” from using the waterway.
A committee spokesperson said those countries had “used the Strait of Hormuz to carry out hostile actions against our country, and have committed unjust and aggressive acts against the Iranian people,” according to Iran’s Tasnim news agency.
The proposal adds another layer of uncertainty to the outlook for commercial shipping through one of the world’s most important energy corridors.
Demand downgrades limit crude’s weekly advance
Despite persistent concerns over supply, oil’s weekly gains were partly restrained by weaker demand expectations.
Both the Organization of the Petroleum Exporting Countries and the International Energy Agency lowered their forecasts for oil demand this year.
The two organisations warned that slower economic growth, elevated prices and constrained supply could weaken consumption in the months ahead.
Those demand concerns have tempered the impact of geopolitical risks, although uncertainty over the Strait of Hormuz continues to keep a sizeable supply premium embedded in crude prices.