LONDON, March 20 — Oil prices gained on Friday despite leading European nations, Japan, and Canada offering to join efforts to secure safe passage for ships through the Strait of Hormuz and the United States (US) outlining moves to boost oil supply.
"The potential for a quick reversal in energy prices is unlikely because damage has been done to production. The fact on the ground remains that we have a tight market," said Saxo Bank commodity strategy head Ole Hansen.
Brent futures rose US$1.67, or 1.5 per cent, to US$110.32 a barrel at 1030 GMT, while U.S. West Texas Intermediate (WTI) crude added ¢33, or 0.3 per cent, to US$96.47.
For the week, benchmark Brent was on track to rise nearly seven per cent, while WTI was set to fall about two per cent in its first weekly decline in five weeks.
Israel and Iran traded fresh attacks on Friday, following a hit on an oil refinery in Kuwait.
In a joint statement on Thursday, after earlier hesitating, the United Kingdom, France, Germany, Italy, the Netherlands, and Japan expressed "our readiness to contribute to appropriate efforts to ensure safe passage through the Strait", through which 20 per cent of the world's oil and liquefied natural gas (LNG) transits.
Looking to curb soaring oil prices, US Treasury Secretary Scott Bessent said Washington may soon remove sanctions on Iranian oil stranded on tankers and that a further release of crude from the US Strategic Petroleum Reserve was possible.
Brent jumped higher than US$119 a barrel on Thursday, coming close to a March 9 peak, after Iran responded to an Israeli attack on a major gas field by knocking out 17 per cent of Qatar's LNG capacity, causing damage that will take up to five years to repair.
US President Donald Trump said he told Israel not to repeat attacks on Iranian gas infrastructure. Israeli Prime Minister Benjamin Netanyahu said his country had acted alone in the attack and Iran no longer has the capacity to enrich uranium or make ballistic missiles.
Phillip Nova senior market analyst Priyanka Sachdeva said that earlier in the Friday session, both benchmarks had shed some of their "war premiums" as world leaders started to acknowledge a need for restraint and de-escalation.
She added that markets will remain sensitive to the critical Hormuz chokepoint.
"The damage has been inflicted, and even if safe passage for tankers is somehow negotiated through Hormuz, reviving logistics fully fledged can take an awfully long time," said Sachdeva.
In a boost to US supply, North Dakota's crude output is expected to rise this month and in the following months as operators in the third-largest oil-producing state restart inactive wells and winter restrictions are eased, the state's regulator said on Thursday.
However, the North Dakota Department of Mineral Resources said that the pace of activity would depend on how long oil prices remain high and that oil majors' budgets have already been set.
