Oil prices extended their gains during Asian trading on Friday as hopes for a complete reopening of the Strait of Hormuz weakened.
Fresh reports suggested that Iran was considering restrictions on U.S. and Israeli-linked vessels using the strategic shipping route, keeping geopolitical risk elevated across energy markets.
Brent crude futures for October delivery rose 1.4% to $83.65 per barrel. Meanwhile, West Texas Intermediate crude futures gained 1.3% to $78.26 per barrel.
Oil Extends Strong Rebound
The latest move followed sharp gains in the previous session.
Brent crude climbed nearly 4%, while WTI advanced around 3%.
Despite the rebound, both major oil benchmarks remained on course for weekly losses of more than 7%.
The renewed buying reflected growing uncertainty over whether shipping through the Strait of Hormuz could fully return to normal.
Iran Considers Restrictions on Hormuz Shipping
Media reports indicated that an Iranian parliamentary committee was examining legislation that could prevent U.S. and Israeli vessels from passing through the waterway.
The proposed measures could also impose penalties of up to 20% of a ship’s cargo value on vessels that violate the restrictions.
Separately, Iran’s Islamic Revolutionary Guard Corps said it had attacked what it described as hostile targets in the Strait of Hormuz.
These developments increased concerns that access to the strategically important route could remain restricted even if broader shipping activity resumes.
Hopes for Full Strait of Hormuz Reopening Fade
Oil prices had fallen earlier in the week after reports suggested Iran and Oman were close to reaching an agreement to restore shipping through the Strait of Hormuz.
That prospect initially eased concerns over a prolonged disruption to global energy supplies.
However, optimism faded after reports suggested that any reopening agreement might not apply to U.S. and Israeli-linked vessels.
As a result, traders continued to price in a geopolitical risk premium.
Why the Strait of Hormuz Matters for Oil Prices
The Strait of Hormuz is one of the world’s most important energy transportation routes.
Approximately one-fifth of global oil and liquefied natural gas shipments pass through the waterway.
Any restrictions on vessel traffic therefore have the potential to disrupt global supply chains and increase volatility in crude oil prices.
Even the possibility of prolonged restrictions can push traders to reassess global supply risks.
Wider Middle East Tensions Add Support
Geopolitical risks also increased elsewhere in the region.
Yemen’s Iran-aligned Houthi movement claimed attacks on Saudi military positions and infrastructure.
Those developments raised additional concerns about security along Red Sea shipping routes, which are also important for global trade and energy transportation.
The possibility of a broader regional conflict helped provide further support to oil prices.
Russian Refinery Attack Adds to Supply Concerns
Energy markets were also monitoring reports of a Ukrainian drone strike on a major Russian refinery.
The attack reportedly triggered a fire at the facility, adding another potential supply concern for crude and refined products.
With geopolitical risks affecting several major energy-producing regions, traders remained highly sensitive to developments that could tighten global supply.
US Jobs Report Could Influence Oil Demand Outlook
Investors are also awaiting the latest U.S. nonfarm payrolls report.
The employment data could provide new clues about the Federal Reserve’s interest rate outlook.
Stronger-than-expected jobs data could reinforce expectations for tighter monetary policy. Higher interest rates can slow economic activity, which may reduce demand for fuel and other energy products.
On the other hand, weaker employment figures could influence expectations for a less restrictive Federal Reserve stance.
For now, oil prices remain supported by uncertainty surrounding the Strait of Hormuz, wider Middle East tensions and fresh concerns over global energy supply.
