Oil finished higher in Asian trading on Friday as renewed clashes between U.S. and Iranian forces stoked worries that disruptions to traffic through the Strait of Hormuz could be prolonged, tightening global supply flows.
As of 21:07 ET (01:07 GMT), November Brent futures were up 0.2% at $95.67 per barrel, while West Texas Intermediate (WTI) crude rose 0.3% to $91.58 per barrel. Those levels left Brent on track for a roughly 7% gain on the week, and WTI headed for about a 10% increase. Both contracts had already reached six-week highs during the previous trading session.
Background to the price move
Market attention sharpened after U.S. forces struck Iranian targets earlier in the week, including military positions close to the Strait of Hormuz. Iran retaliated with missile and drone attacks directed at U.S. and allied positions across the Gulf, with reported strikes affecting locations in Kuwait, Bahrain and Jordan.
Traders have concentrated on the Strait of Hormuz because of its importance for global oil shipments. Iran has widened restrictions on international shipping through the channel, increasing concern that these measures could continue and further restrict flows of crude and refined products.
The hostilities have also put a humanitarian focus on the events. Reports indicated a U.S. strike hit an area hosting a wedding in southern Iran, resulting in civilian deaths and drawing condemnation from Tehran.
On the diplomatic front, U.S. Vice President JD Vance told reporters on Thursday that the United States does not plan to enter talks with Iran unless Tehran halts attacks on commercial shipping in the Strait of Hormuz.
Supply-side signals and policy watch
Oil prices were further supported by signs of tighter inventories in the United States. Data from the Energy Information Administration showed U.S. commercial crude stocks fell to about 424.5 million barrels in the week ended Aug. 28, down from 428.9 million barrels a week earlier. The U.S. Strategic Petroleum Reserve was reported at about 286.6 million barrels.
Attention will also center on OPEC+ supply policy. The producer group is expected to leave its October output policy unchanged when it meets on Sunday, according to reports citing unnamed sources. That meeting comes as the group completes the removal of one layer of its production cuts, although the disruptions passing through the Strait of Hormuz have lessened the immediate linkage between OPEC+ production decisions and price movements.
What market participants are watching next
- Developments in and around the Strait of Hormuz and any further restrictions on shipping.
- Additional military actions or diplomatic statements that could alter risk perceptions around Gulf exports.
- Weekly inventory updates and the outcome of the OPEC+ meeting on Sunday.