Crude oil futures climbed more than $1 a barrel on Friday as tanker attacks in the Strait of Hormuz and a lack of progress on peace negotiations between the Trump administration and Iran's leadership fueled supply concerns. Brent futures settled at $88.52 a barrel, up $1.45, or 1.67%. U.S. West Texas Intermediate crude futures finished at $82.40, up $1.15, or 1.42%. Both benchmarks were on track for weekly gains of approximately 6% and 5.4%, respectively.

Market Context

The rally came as geopolitical tensions in the Middle East intensified ahead of the weekend. The United States indicated it could maintain a naval blockade of Iran indefinitely and increase economic pressure on Tehran following stalled ceasefire talks. Treasury Secretary Scott Bessent warned on Newsmax that measures would be applied "like have never been seen in the history of economic isolation of a country." Meanwhile, OPEC forecasts pointed to weaker demand growth, and U.S. crude inventories posted their largest weekly increase in more than 3-1/2 years.

Analysis

Market participants are positioning for potential supply disruptions as shipping traffic through the Strait of Hormuz slowed below monthly averages amid competing claims over control of the strategic waterway. Before U.S.-Israeli attacks on Iran began in late February, the strait handled approximately one-fifth of global oil and liquefied natural gas supplies. Andrew Lipow, president of Lipow Oil Associates, noted that a "day of reckoning" may come if traffic through the strait remains constrained, warning that while crude oil prices might stabilize around $80 per barrel, refined products could remain elevated with diesel at $180 per barrel equivalent and gasoline at $130.

Two vessels from Abu Dhabi National Oil Company were attacked while transiting the Strait on Thursday, an incident the UAE government condemned as an Iranian attack. Separately, crude oil exports from Russia's Sheskharis terminal at the Black Sea port of Novorossiysk were suspended Friday following a drone attack, adding to disruptions at one of Moscow's key export outlets.

Key Numbers

- Brent settled at $88.52/barrel, up $1.45 (1.67%) on the session

- WTI finished at $82.40/barrel, up $1.15 (1.42%)

- Brent weekly gain: 6.0% heading into Friday's close

- WTI weekly gain: 5.4% heading into Friday's close

- Strait of Hormuz handles roughly 20% of global oil and LNG supplies

What to Watch

Traders should monitor for additional U.S. policy announcements next week regarding Iran, as Bessent signaled unprecedented economic measures could be forthcoming. Shipping traffic levels through the Strait of Hormuz will be closely watched for signs of further constraint or normalization. The situation at Russia's Sheskharis terminal and potential impacts on Black Sea crude flows merit attention. Any escalation in attacks on energy infrastructure could add additional upside risk to prices.