Oil futures rose on Friday, extending weekly gains after the U.S. threatened an indefinite blockade of Iranian oil exports, tightening global supply and lifting prices.
Brent crude futures for July delivery traded 0.4% higher at $82.80 a barrel, while U.S. West Texas Intermediate (WTI) crude for June delivery rose 0.5% to $78.50 a barrel. Both benchmarks are on track for weekly gains of around 2% as geopolitical risks in the Middle East escalate.
The U.S. State Department said Washington would take steps to block Iranian oil sales indefinitely, following a series of attacks on shipping in the region. The move signals a prolonged disruption to Iranian crude flows, which have already been constrained by existing sanctions. Iran has warned of retaliatory measures, raising concerns over further supply disruptions.
Analysts noted that the threat of an indefinite blockade could tighten global oil markets, particularly if Iranian exports are significantly reduced. "Any prolonged disruption to Iranian oil would tighten supply and support prices, especially in a market already sensitive to geopolitical risks," said a commodity strategist at a major bank.
The U.S. has previously imposed sanctions on Iran’s oil sector, but the latest threat suggests a more aggressive approach under current geopolitical tensions. The Strait of Hormuz, a critical chokepoint for global oil shipments, remains a flashpoint.
Oil prices have also been supported by expectations of steady demand from major economies, despite concerns over economic slowdowns in some regions. The International Energy Agency (IEA) recently revised its 2024 oil demand growth forecast upward, citing resilient consumption in Asia and the U.S.
Investors are closely monitoring developments in the Middle East, where any escalation could further disrupt supply chains and drive prices higher. The U.S. threat of an indefinite blockade adds a new layer of uncertainty to an already volatile market.
