Summary
- Oil on track for second-largest weekly rise since Iran war began
- Brent up 18% so far this week, WTI up 16%
- Trump says he would not set a timetable for ending the conflict
(Reuters) – Oil rose on Friday on concerns of a renewed military escalation in the Middle East after Iran released footage of commandos boarding a cargo ship in the Strait of Hormuz, and a lack of progress in re-opening the key waterway.
Navigation through the strait, which before the war carried about a fifth of global oil output, remains effectively blocked. Iran’s capture of two cargo ships highlighted Washington’s difficulties in trying to control the passage.
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Brent crude futures were up $2.18, or 2.1%, to $107.25 a barrel at 1019 GMT, while U.S. West Texas Intermediate futures gained $1.78, or 1.9%, to $97.63.
For the week, Brent is up 18% and WTI 16%, the second-largest gains since the war began.
Both contracts settled more than 3% higher on Thursday after reports that air defences were engaging targets over Tehran and of a power struggle between Iran’s hardliners and moderates.
“There is no de-escalation in sight,” said Tamas Varga of oil broker PVM.
U.S. President Donald Trump said Iran may have loaded up its weaponry “a little bit” during a two-week ceasefire, but added that the U.S. military could eliminate it in a single day. On Wednesday, he said he would indefinitely extend the ceasefire to allow for further peace talks.
The ceasefire is increasingly looking like a preparatory phase for more war, Haitong Futures said in a report. If peace talks fail to make progress by the end of April and fighting resumes, oil prices could climb to new highs for the year, it added.
“There’s set to be fresh financial pain ahead as key shipments from the region remain blocked,” said Susannah Streeter, chief investment strategist at UK investment service Wealth Club. “That is set to keep costs elevated for a vast array of commodities.”
As investors and governments around the world look for a lasting peace, Trump said he would not set a “timetable” for ending the conflict and that he wanted to make “a great deal.”
“Don’t rush me,” he said when asked how long he was willing to wait for a long-term deal.
Additional reporting by Sam Li and Helen Clark. Editing by Mark Potter, Elaine Hardcastle
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