Crude futures climbed in midday trading on Friday as the US shifts its strategy toward economic pressure and maintaining an indefinite blockade against Iran, while continued attacks on ships raised concerns over further disruptions to Middle East crude supplies.
Front-month West Texas Intermediate crude futures rose by 1.2% to $82.21 per barrel, while Brent futures advanced 1.3% to $88.18/bbl.
Soojin Kim, a research analyst at MUFG, said that rising Gulf exports could cap near-term price gains, but the lack of a durable Hormuz agreement and continued threats in both Hormuz and the Red Sea should keep a sizeable geopolitical premium embedded in oil prices.
On Friday, the US Treasury Secretary Scott Bessent said Washington would announce additional measures next week, describing them as economic actions on a scale not previously seen, according to media reports.
Bessent said the US will continue its naval blockade of Iran's ports, part of Washington's pressure campaign to push Tehran to reopen the Strait of Hormuz.
Defense Secretary Pete Hegseth reportedly said on Thursday that the US military had the capacity to sustain its naval presence in the region indefinitely.
Gelber & Associates strategists said the market is maintaining a risk premium in the barrel, but Friday's restrained move suggests that inventory and demand concerns are limiting the market's response to increasingly serious headline risk from the Middle East.
Fueling bullish sentiment, the UAE said late on Thursday that Iran attacked two vessels linked to state-owned energy giant Adnoc, which were transiting the Hormuz.
Iran's Islamic Revolutionary Guard Corps said on Friday that the Strait remains closed, dismissing US claims about the level of maritime and oil traffic through the strategic waterway.
Ali Ozamaei, the commander of the IRGC Navy, said the Strait of Hormuz is closed and that Iranian forces maintain firm control over activity in the waterway, according to Iranian state media.
Tensions around the Middle East energy chokepoints remain elevated on Aug. 1, though the number of confirmed crossings increased, with Hormuz recording 13 crossings, up 44% over the day, while Bab el-Mandeb traffic rose 4% to 29 crossings.
Meanwhile, two oil slicks have appeared in Iranian waters, as attacks on tankers and other vessels by Iran and the US stoked concern about environmental damage to the Gulf, according to multiple media reports.
UK-based maritime risk and response firm Ambrey said it has been hired to salvage a grounded Russian shadow fleet tanker off Oman's coast and to contain an oil spill that threatens wildlife, according to multiple media reports.
While the threat to crude supplies has kept a floor under oil prices, concerns over global demand have capped the gains. US crude stocks rose by about 17.4 million barrels to 424.4 mmbbls in the week ended Aug. 7, according to the EIA, adding to bearish sentiment.