Global oil prices crept higher on Friday, capping a volatile week that has seen the Strait of Hormuz, the world’s most critical oil chokepoint, grind to a near-halt as fighting between the United States and Iran resumed after weeks of an uneasy ceasefire.
Brent crude added 4 cents to $76.34 per barrel by 03:19 GMT, while U.S. West Texas Intermediate rose 7 cents to $72.15 per barrel. Both benchmarks are on track for substantial weekly gains, roughly 6% for Brent and 5% for WTI, reflecting a market still pricing in real risk to Gulf oil flows even as prices have retreated from their mid-week peaks.
The renewed hostilities trace back to a memorandum of understanding signed in mid-June between President Trump and Iranian officials that had ended the initial war and reopened Hormuz to shipping.
That truce began fraying late last month, and this week it broke down in earnest after Iranian forces struck commercial tankers transiting the strait, including a Qatari-owned LNG carrier and a Saudi-flagged supertanker near Oman.
Washington responded with a fresh wave of airstrikes on Iranian military sites, and Tehran retaliated by hitting U.S. installations across Gulf states, a tit-for-tat escalation that has pushed tanker traffic through the waterway to its lowest levels in weeks.
Ship-tracking data cited in U.S. media coverage this week showed the recovery in Hormuz transits stalling out: just six tankers made the transit through the strait on Thursday, down from 21 the day before, as escalating strikes rattled shipowners.
The strait normally carries around a fifth of global seaborne oil and gas supplies, making even a partial disruption a significant price-swing factor.
Vandana Hari, founder of Vanda Insights, said the market is still pricing in a meaningful risk premium given the uncertainty over when normal transit might resume, even as prices have eased from mid-week highs.
She added that traders appear to retain some confidence that Washington and Tehran will eventually return to negotiations, which is helping to cap further upside.
That view was echoed by Daniel Hynes, senior commodity strategist at ANZ, who noted that despite the intensified U.S. strikes on Iranian military sites, markets took some comfort from the Trump administration’s apparent decision to steer clear of Iran’s energy infrastructure, directly reinforced by the president’s own public downplaying of the risk of a full-scale relapse into war.
The latest flare-up coincided with the burial of Iran’s slain Supreme Leader, Ayatollah Ali Khamenei, who was killed on February 28, the opening day of the original U.S.-Israeli war on Iran.
According to Iranian state media reports and Western outlets, Khamenei’s body was laid to rest early Friday at the Imam Reza shrine in Mashhad, closing out roughly a week of mass funeral processions that had moved through both Iraq and Iran.
A senior Iranian military commander vowed retribution against those responsible for Khamenei’s death, describing the week’s mourning ceremonies as a show of national resolve.
Separately, Iranian media reported explosions across the country’s south, including near Bushehr, the site of Iran’s only civilian nuclear power plant, which also sits close to Kharg Island, the terminal handling the bulk of the country’s crude exports.
Even as strikes intensified, President Trump sought to reassure markets that the conflict would not spiral back into full-scale war, suggesting any further escalation would be short-lived.
His comments, paired with the apparent restraint shown toward Iranian oil and energy assets specifically, have been credited by strategists with keeping crude prices from spiking further despite the shipping disruptions.
With Hormuz transits still running well below normal and no clear timeline for a full reopening, traders are likely to keep a war-risk premium baked into prices heading into next week.
Much now hinges on whether the fragile June memorandum can be salvaged through renewed U.S.-Iran diplomacy or whether further strikes on shipping or military targets tip the fragile ceasefire into a broader resumption of the conflict that began in late February.
WHAT YOU SHOULD KNOW
Oil prices are climbing toward solid weekly gains not because of a new war, but because Hormuz shipping traffic has nearly ground to a halt; the world’s most important oil chokepoint, carrying roughly a fifth of global supply, is functioning at a fraction of normal capacity.
Markets are pricing in real disruption risk, but they’re not yet pricing in a full relapse into war, since traders still believe both Washington and Tehran want to preserve enough of their ceasefire to avoid it.
That balance of real supply risk, capped by fragile diplomatic hope, is the single factor driving prices right now, and it could break in either direction depending on what happens at Hormuz next.
