Oil prices were mixed on Friday as escalating friction over transit fees in the Strait of Hormuz dampened hopes for an imminent supply normalization, as consumers scrambled to gather energy supplies for the months ahead.
Brent crude futures fell more than 1% to $81.67 per barrel, while Murban crude futures advanced by nearly 2% to $81.10/bbl. However, both benchmarks were headed for a second straight weekly loss.
"Crude oil gained as cracks appeared around the proposal to reopen the Strait of Hormuz," ANZ analysts noted.
ING analysts noted that oil prices rallied earlier, taking Brent back above $82/bbl, and this strength continued into early morning trading.
Developments over the past 24 hours demonstrated once again that negotiations between the US and Iran are unlikely to proceed smoothly, they said.
A senior Iranian official said Iran wants to charge ships 5% to 7% of their cargo value to use the strait, while Oman is looking at a 3% fee, but Washington is pushing for free passage with no fees, Reuters reported.
Geopolitical friction intensified as Iranian state media reported strikes on hostile targets in the Strait of Hormuz, alongside claims from Houthi militants of a large-scale attack against Yemen's Saudi-backed government forces.
"For now, we hold onto our view that flows will start to normalise through the third quarter, which leaves us expecting Brent to average $80/bbl this quarter. However, there's plenty of risk and uncertainty to this view," ING said.
Saudi Arabia cut its official selling prices for almost all crude grades to all destinations for September loadings.
Arab Light destined for Asia was reduced by $0.50/bbl to a $2/bbl discount against the benchmark, responding to pressure from Asian buyers navigating longer, costlier shipping routes around Africa to bypass Red Sea hazards, analysts said.