Oil Prices Surge as Tanker Attacks and Blockade Concerns Mount

Oil prices surged on Friday due to tanker attacks and stalled peace talks between the US and Iran. Crude oil futures climbed over $1 a barrel, with Brent futures settling at $88.52 a barrel, up $1.45 or 1.67 percent, while U.S. West Texas Intermediate crude futures finished at $82.40, up $1.15 or 1.42 percent.

The price increase was driven by the US's indefinite naval blockade of Iran and increased economic pressure on Tehran in response to stalled ceasefire talks. Treasury Secretary Scott Bessent warned that the US will apply measures 'like have never been seen in the history of economic isolation of a country'.

Shipping traffic through the Strait of Hormuz, which handles about one-fifth of global oil and liquefied natural gas supplies, fell below its monthly average as the US and Iran made claims over control of the strait. Two vessels from Abu Dhabi National Oil Company were attacked while transiting the strait on Thursday.

Norbert Rucker, head of economics and next generation research at Julius Baer, cautioned that storage is holding up better than feared, which could pull oil prices lower. However, Andrew Lipow, president of Lipow Oil Associates, warned that a 'day of reckoning' may come if traffic in the strait remains constrained.