LONDON — Oil prices fell more than 3% on Friday but remained on track for strong weekly gains amid concerns over potential supply disruptions in the Red Sea and escalating tensions in the Iran conflict.
Brent crude futures dropped $4.00, or 3.96%, to $96.70 a barrel by 0946 GMT, after settling above $100 a barrel on Thursday for the first time since May. The benchmark had surged 7% in the previous session after Iran-aligned Houthi forces announced attacks on two Saudi oil tankers in the Red Sea.
Despite Friday’s decline, Brent was on track for a 9.7% weekly gain.
U.S. West Texas Intermediate (WTI) crude futures fell $3.15, or 3.42%, to $89.04 a barrel, while remaining on course for a weekly increase of around 8%.
U.S. President Donald Trump vowed to impose “severe military punishment” on Iran and its Houthi allies following the attacks in the Red Sea.
Iran, meanwhile, urged its allies in Yemen to close the Bab al-Mandab Strait if the United States continues targeting Iran’s electricity infrastructure. The strategic waterway links the Red Sea to the Indian Ocean and is the world’s second-most important oil shipping route after the Strait of Hormuz.
On Monday, the Houthis announced a maritime blockade on Saudi Arabia, whose oil exports have been rerouted through pipelines to avoid the Strait of Hormuz, which remains closed by Iran.
Preliminary vessel-tracking data from Kpler showed that only three ships per day transited the Strait of Hormuz over the past three days.
Two vessels, including the empty Noble very large crude carrier (VLCC), entered the Gulf through the strait on Thursday.
Kpler data also showed that 32 vessels passed through the Bab al-Mandab Strait on Thursday, up from 26 the previous day, with two vessels having crossed by Friday morning.
“In the appropriate shipping lanes, vessels are still moving, so this is not a complete blockade as some had feared,” said Giovanni Staunovo, an analyst at UBS.
Analysts at J.P. Morgan said in a note that every additional month of oil supply disruption could add $7–8 per barrel to Brent crude prices, potentially pushing the monthly average to around $114 a barrel if disruptions persist for three months.
Russia said on Friday that its forces carried out overnight strikes on three Ukrainian ports, targeting infrastructure including loading and unloading facilities and fuel reserves supporting the Ukrainian military.
Kazakhstan’s Energy Ministry said on Thursday that oil companies had temporarily reduced production after suspected Ukrainian attacks forced the closure of the country’s main oil export terminal on the Black Sea.
Reuters
