Oil prices slipped slightly on Friday but remained on course for a second consecutive weekly increase as tensions between the United States and Iran raised fresh concerns about global crude supplies.
Brent crude futures fell 50 cents, or 0.53%, to $93.28 a barrel, while US West Texas Intermediate crude declined 44 cents, or 0.51%, to $86.39.
Despite the day’s modest losses, Brent was up more than 5.4% for the week and WTI had gained 4.8%. Both benchmarks reached their highest levels since July 24 during the previous trading session.
The latest gains have been driven by concerns over further disruptions to oil exports from the Middle East. Washington has threatened to impose what it describes as the toughest financial sanctions ever against Iran, while the US naval blockade is already restricting Iranian oil shipments.
“The US is taking a very firm stance against Iran,” said ANZ analyst Soni Kumari, pointing to the renewed blockade and threats of additional sanctions as factors supporting prices above $90 a barrel.
Iran warned on Friday that any new US measures would receive a “devastating” response. Washington has said its pressure campaign is aimed at forcing political change in Tehran.
Analysts said the immediate effect of additional sanctions on oil supply could be limited because Iranian exports are already heavily restricted. However, further retaliation or attacks on shipping could create a more serious disruption.
“The immediate impact on supply may be limited as Iranian exports are already heavily constrained by the US naval blockade,” said Crispus Nyaga, a research analyst at Empire FX.
He warned that shipping incidents could increase if Iran responds to the sanctions, particularly while traffic through the Strait of Hormuz remains far below normal levels.
The waterway is a critical route for global energy supplies. Before US and Israeli attacks on Iran began in late February, around one-fifth of the world’s oil and liquefied natural gas shipments passed through the Strait of Hormuz.
Shipping activity has since fallen sharply. Seven commodity ships passed through the strait on Thursday, according to ship-tracking data from Kpler, around half the number recorded the previous day.
Oil markets are also dealing with reduced output from major producers including Saudi Arabia, Iraq, the United Arab Emirates and Kuwait. An earlier peace agreement between the US and Iran expired this week without either side moving to restart negotiations.
Iranian crude supplies to Chinese buyers have also tightened, according to trade sources. Offers have declined while prices have increased as the US blockade restricts shipments and traders prepare for possible additional sanctions.
Elsewhere, Ukraine said its military had struck a Russian oil refinery in Perm overnight. President Volodymyr Zelenskiy said the facility was more than 1,600 kilometres from the Ukrainian border, adding another source of uncertainty to global energy markets.
