Oil prices rose modestly in Asian trading on Friday and are poised for a sharp weekly gain as the United States and Iran escalated hostilities, adding a hefty geopolitical risk premium. At 20:36 ET (00:36 GMT), Brent crude futures for September delivery increased 0.8% to $84.88 per barrel, while West Texas Intermediate (WTI) futures rose 0.9% to $79.62 per barrel. Both benchmarks are on track for weekly gains of more than 11% following the latest round of strikes.
The U.S. military conducted its sixth consecutive night of strikes on Iran on Thursday, aiming to further degrade Iranian military capabilities. Tehran has repeatedly threatened to disrupt shipping through the Strait of Hormuz, a chokepoint through which roughly one‑fifth of global oil and fuel supplies pass. Vessel traffic through the strait has already dropped sharply after the re‑imposition of a U.S. naval blockade on Iranian ports.
Despite the heightened risk, the market has not produced another explosive rally; traders are weighing the possibility of prolonged supply disruptions against the potential for producers to offset any shortfall. Regional mediators, including Qatar, Egypt and Pakistan, continue diplomatic talks even after the collapse of an earlier ceasefire.
U.S. inventory data released this week indicate a tightening crude market. The Energy Information Administration (EIA) reported that U.S. crude oil stockpiles fell by 1.7 million barrels in the week ended 10 July, leaving 409.7 million barrels on hand, a larger‑than‑expected draw. Gasoline inventories declined by 1.5 million barrels over the same period. Earlier in the week, the American Petroleum Institute (API) showed U.S. crude inventories fell by about 564,000 barrels, a smaller draw than analysts had expected.
Overall, the combination of escalating US‑Iran conflict, reduced shipping through the Strait of Hormuz, and tighter U.S. inventory balances is driving oil benchmarks toward a weekly surge exceeding 11%.