US Iran Blockade Threat Sends Oil Prices Soaring

Oil prices rose on Friday and are set to gain for the week as the US threatened an indefinite naval blockade of Iran, raising concerns about disruptions to crude supplies from the Middle East.

The move implies little hope of a near-term resolution in the region, with Brent futures up 12 cents or 0.14% at $87.19 a barrel and U.S. West Texas Intermediate crude futures up 50 cents or 0.62% at $81.75 a barrel.

Bjarne Schieldrop at SEB Research said higher oil prices are 'a natural result' of the US approach, adding that a return to normal flows out of the Strait of Hormuz is now without near-term hopes.