LONDON, July 10 — Oil prices eased on Friday but remained on track for weekly gains as renewed United States (US)-Iran fighting disrupted shipping in the Strait of Hormuz, stoking concerns over supply disruptions.
Brent futures were down ¢68, or 0.9 per cent, at US$75.62 a barrel by 0817 GMT. U.S. West Texas Intermediate crude dropped ¢64, or 0.9 per cent, to US$71.44.
For the week, Brent was set for a gain of about five per cent, and WTI was on track for an increase of about four per cent.
"Prices have backed off the midweek highs, but there is still a substantial risk premium as Hormuz transits are back to a near-standstill with no clear signs of when normal reopening might resume," said oil market analysis provider Vanda Insights' Vandana Hari.
Iranian Armed Forces launched attacks on US military infrastructure in Gulf states on Thursday after US strikes on Iran's southern coastal and eastern provinces, further straining a creaking ceasefire.
Separately, Iranian media reported multiple explosions across southern Iran. The area included Bushehr, where one of the country's nuclear plants is located.
On Friday, the International Energy Agency said its forecast of a significant oil market surplus next year could be upended by the recent escalation in hostilities between the US and Iran.
The developments have also delayed a full reopening of the Strait of Hormuz, which carries about 20 per cent of daily global oil and gas supplies before the start of the war on February 28.
UBS analyst Giovanni Staunovo said that the lack of any new US strikes on Iran overnight is probably weighing on oil prices, though a drop in flows through the Strait of Hormuz is limiting the downside.
Ship-tracking data showed that tanker traffic through the Strait was at a near-standstill on Thursday, as vessel owners assessed the risk after Iran hit a Qatari liquefied natural gas ship exiting the waterway near Oman, triggering the latest strikes.
However, on Wednesday, US President Donald Trump said that he did not think the war would restart and that "anything that happens is going to be over very quickly".
"Despite the US ramping up attacks on military sites in Iran, the market drew some reassurance from the Trump administration’s decision to avoid targeting Iranian energy infrastructure," said ANZ commodity strategist Daniel Hynes.
