Oil prices moved lower on Friday but remained on course for weekly gains as renewed military exchanges between the United States and Iran kept attention on potential disruptions to energy shipments through the Strait of Hormuz.
As of 03:47 ET (07:47 GMT), November Brent crude futures fell 0.5% to $95.09 a barrel, while WTI crude futures declined 0.5% to $90.81 a barrel.
Brent was heading for a weekly increase of about 7%, while WTI was on track to gain roughly 10%. Both benchmarks remained close to the six-week highs reached during the previous session.
Strait of Hormuz Remains Key Supply Concern
The latest escalation followed U.S. strikes on Iranian targets earlier in the week, including military assets near the Strait of Hormuz.
Iran subsequently carried out missile and drone strikes against U.S. and allied positions across the Gulf region, including Kuwait, Bahrain and Jordan.
Iran has also expanded restrictions affecting international shipping through the Strait of Hormuz, keeping the waterway at the centre of concerns about potential disruption to global oil supplies.
The conflict has also raised concerns about civilian casualties. A U.S. strike was reported to have hit an area hosting a wedding in southern Iran, killing civilians, according to the supplied report. Tehran condemned the attack.
U.S. Vice President JD Vance said on Thursday that the United States did not plan to hold talks with Iran unless Tehran stopped attacking commercial shipping in the Strait of Hormuz.
“Escalation is propping up crude, but the rally may lose traction if Hormuz shipments keep moving smoothly,” ING analysts said in a note.
U.S. Crude Inventories Decline
Oil prices were also being supported by lower U.S. commercial crude inventories.
Commercial crude stocks fell to approximately 424.5 million barrels in the week ended August 28, from 428.9 million barrels a week earlier, according to the Energy Information Administration.
The U.S. Strategic Petroleum Reserve stood at approximately 286.6 million barrels.
OPEC+ Output Policy in Focus
OPEC+ is expected to leave its October oil production policy unchanged when the group meets on Sunday, Reuters reported, citing sources.
The meeting comes as the producer group completes the unwinding of one layer of production cuts. At the same time, disruption affecting shipping through the Strait of Hormuz remains a factor in global oil supply conditions.