Oil Prices Edge Higher as US Threatens Prolonged Blockade of Iran
Oil prices edged higher on Friday as the United States threatened to maintain a naval blockade of Iran indefinitely, renewing concerns over crude supplies. Despite weaker demand forecasts and rising US inventories, Brent crude futures rose 9 cents, or 0.1%, to $87.16 a barrel by 0130 GMT.
US West Texas Intermediate (WTI) crude gained 4 cents to $81.29 a barrel, following a decline of more than 2% in the previous session. The gains came after both benchmarks fell on Thursday, but Brent was still on track for a weekly gain of around 4%, while WTI was also headed for a rise of about 4%.
The US threats to maintain a blockade of Iran indefinitely have heightened concerns that disruptions to oil flows through the region could persist. The Strait of Hormuz remains a key supply route, with Iran restricting traffic and two vessels belonging to state-owned Abu Dhabi National Oil Company being attacked while transiting the strait on Thursday evening.
Concerns over supply disruptions have been partly offset by a weaker outlook for global oil demand, with Opec and the International Energy Agency lowering their forecasts for demand growth this week. US crude inventories recorded their largest weekly increase in more than three and a half years.