Oil rises on intensifying US-Iran hostilities, threat of Red Sea closure

Oil prices rose on Friday after the U.S. and Iran stepped up attacks across the Gulf, with their broken truce limiting oil flows out of the Strait of Hormuz and with Tehran asking the Houthi political and military organisation to stand ready to shut the Red Sea export route. Brent crude futures rose 70 cents, or about 0.83%, to $84.93 a barrel at 0312 GMT, while U.S. West Texas Intermediate futures rose 81 cents, or 1.03%, to $79.76 a barrel, erasing losses from the previous session.

Both benchmark contracts have climbed nearly 12% this week, with Brent on track for a third consecutive weekly gain and WTI on pace for a second weekly gain. Tim Waterer, chief market analyst at KCM Trade, said, "The potential threat of the Red Sea becoming another major supply disruption point is further complicating the global oil outlook." He noted the "dual-risk scenario" was keeping a geopolitical premium embedded in both benchmarks. The U.S. launched two major waves of air strikes in a single day on Wednesday, mostly at targets near Iran's southern coast, and kept firing on Thursday. Qatar's defence ministry said its armed forces thwarted an Iranian missile attack early on Friday, while the interior ministry said a child was injured by shrapnel. International Energy Agency Executive Director Fatih Birol said on Thursday, "Oil security is still a critical issue," and added, "We should be worried, and I am worried, if the situation does not improve in the next few weeks." The U.S. Central Command said American forces began "a new wave of strikes agains..."