Oil futures rose 1% on Thursday supported by rising supply concerns as US military strikes against Iran intensified, while data showed US crude inventories declined further.
Front-month Murban crude futures rose about 1% to $79.30 per barrel, while Brent futures were up 1% at $85.82/bbl.
US President Donald Trump said the administration will continue its bombardment of Iranian targets until Iran agrees to reopen the critical maritime chokepoint and cease attacks on commercial vessels.
Adding to the pressure, US Central Command confirmed on Wednesday that it disabled a tanker attempting to breach the ongoing naval blockade, while the US Treasury issued further sanctions against entities linked to the Islamic Revolutionary Guard Corps.
Iran has signaled that it will maintain the closure of the Strait until the blockade and strikes are rescinded, analysts said.
The market remains increasingly sensitive to supply constraints following a 1.7 million-barrel drawdown in US commercial crude inventories for the week ending July 10, leaving stocks at 409.7 million barrels, according to the Energy Information Administration data.
"The concern is that renewed oil supply disruptions come amid the large inventory drawdowns through the second quarter, leaving the market more vulnerable," ING analysts said.
"In addition, global SPR releases, which have helped the market out over recent months, are set to end in the next few weeks," they noted.
Meanwhile, Russian energy companies have approached Indian refiners for additional gasoline supplies after Ukrainian strikes severely disrupted Russia's refining capacity, Reuters reported Wednesday, citing sources.