By Anushree Mukherjee
Aug 14 (Reuters) – Oil prices rose on Friday and were on track for weekly gains after the United States threatened an indefinite naval blockade of Iran, raising concerns about disruptions to crude supplies from the Middle East.
Brent futures were up $1.43, or 1.64%, to $88.50 a barrel at 0810 GMT, while U.S. West Texas Intermediate crude futures were up $1.56, or 1.92%, to $82.81 a barrel.
Higher oil prices are a natural result of the latest approach by the U.S., which implies a substantial extension of the trouble in the Middle East with little hope of a near-term resolution, said Bjarne Schieldrop at SEB Research.
On Thursday, the U.S. warned it could maintain a naval blockade of Iran indefinitely and ramp up economic pressure on Tehran as ceasefire talks have stalled.
“Watch this space for more announcements coming next week because we are going to apply measures like have never been seen in the history of economic isolation of a country,” Treasury Secretary Scott Bessent told Newsmax’s “Rob Schmitt Tonight” programme in an interview.
“A return to normal flows out of the Strait of Hormuz is now suddenly without any near-term hopes,” Schieldrop said.
The latest U.S. threats come as Iran curbs flows through the Strait of Hormuz, which handled about one-fifth of global daily oil and liquefied natural gas supplies before the conflict began in late February.
Shipping traffic in the strait fell below the month’s average towards the end of the week, with both countries making competing claims over control of the waterway.
Two vessels from the state-owned Abu Dhabi National Oil Company were attacked transiting the strait on Thursday, UAE state news agency WAM said, an incident the UAE government condemned as an Iranian attack.
Meanwhile, forecasts from OPEC and the International Energy Agency pointed to weaker demand growth, while U.S. crude inventories posted their largest weekly increase in more than 3-1/2 years.
“This week’s reports by the IEA and EIA were quite revealing. Storage is holding up much better than feared, which should pull oil prices lower,” said Norbert Rucker, head of economics and next generation research at Julius Baer.
(Reporting by Mohi Narayan in New Delhi and Helen Clark in Perth. Editing by Clarence Fernandez and Mark Potter)
