Oil prices moved higher on Friday amid growing concerns that military tensions in the Middle East could intensify, after Iran released footage showing commandos boarding a cargo vessel in the Strait of Hormuz and reports emerged that its air defence systems had engaged “hostile targets.”
Brent crude futures climbed 99 cents, or 0.94%, to $106.06 per barrel at 0410 GMT, while U.S. West Texas Intermediate crude rose 71 cents, or 0.73%, to $96.56.
Over the week, Brent gained 17.13%, while WTI advanced 15.13%, marking the second-largest weekly increase since the conflict began.
The shutdown of the Strait of Hormuz following the outbreak of the U.S.-Israeli war with Iran has disrupted roughly 20% of global oil and liquefied natural gas supply.
Both benchmarks had already surged more than 3% on Thursday, jumping by about $5 per barrel after reports that air defences were engaging targets over Tehran and amid signs of internal tensions between hardline and moderate factions in Iran.
U.S. President Donald Trump said Iran may have increased its weapons stockpile “a little bit” during the two-week ceasefire, but added that U.S. forces could eliminate it within a single day.
According to Haitong Futures, the current ceasefire phase increasingly appears to be a preparation period for further conflict. The firm noted that if U.S.-Iran negotiations fail to deliver meaningful progress by the end of April and hostilities resume, oil prices could reach new highs for the year.
Iran on Thursday released footage showing commandos boarding a large cargo ship after the breakdown of peace talks, highlighting its control over the Strait of Hormuz, a key route through which about 20% of global oil and gas flows.
As global leaders and investors continue to seek a lasting resolution, Trump said he would not set a “timetable” for ending the conflict with Iran and emphasised his goal of securing “a great deal.”
“Don’t rush me,” he said when asked how long he would be willing to wait for a long-term agreement with Tehran.
Analysts warn that prolonged disruption in the Strait of Hormuz could drive global inventories of crude and refined products below typical seasonal averages by late May or early June, reintroducing a supply risk premium into oil markets, according to Mingyu Gao, chief researcher for energy and chemicals at China Futures.
Separately, Trump announced on social media that Israel and Lebanon had agreed to extend their ceasefire by three weeks following high-level talks at the White House.
“The Meeting went very well! The United States is going to work with Lebanon in order to help it protect itself from Hezbollah,” Trump wrote on Truth Social. Hezbollah, the Iran-backed militant group engaged in conflict with Israel, was not present at the discussions and maintains that it has “the right to resist” occupying forces.
Trump added that he looks forward to welcoming Israeli Prime Minister Benjamin Netanyahu and Lebanese President Joseph Aoun in the near future.
Prior to this announcement, Israel had warned that it was prepared to resume military action against Iran.