NEW YORK: U.S. oil prices jumped more than 3% at the open on Friday after fighting between the United States and Iran resumed around the Strait of Hormuz, reviving concern over flows through one of the world’s most important energy chokepoints. West Texas Intermediate, the U.S. crude benchmark, later pared gains but still traded higher at $95.26 a barrel by 0650 GMT, while Brent crude stood at $100.73. The gains ended three straight sessions of declines tied to reports of movement toward a ceasefire.
The latest rise followed Iranian accusations that Washington had violated a month-long ceasefire. The United States said its strikes were retaliatory after Iranian forces fired on U.S. Navy vessels transiting the Strait of Hormuz on Thursday. The renewed exchange reversed part of the sharp losses that had followed reports earlier in the week that the two sides were nearing an agreement to halt fighting, even as broader disputes linked to the conflict and the waterway remained unresolved.
U.S. Central Command said Iranian forces launched missiles, drones and small boats at USS Truxtun, USS Rafael Peralta and USS Mason as the destroyers moved through the passage toward the Gulf of Oman. It said no U.S. assets were struck and that American forces responded with self-defense strikes on Iranian military facilities tied to the attack, including missile and drone launch sites and command-and-control locations. Markets reacted quickly because the strait remains a major route for crude and fuel shipments.
Strait risk drives crude higher
According to the Energy Information Administration, oil flows through the Strait of Hormuz averaged 20.9 million barrels a day in the first half of 2025, equal to about 20% of global petroleum liquids consumption. The narrow corridor is also a major route for liquefied natural gas. Any disruption there tends to reverberate across futures markets, tanker activity and refining margins, helping explain why crude benchmarks rose sharply again as traders responded to the latest verified military developments.
Price action later moderated, but the early move was large enough to underscore how sensitive the market remains to each turn in the conflict. Brent and WTI had fallen for three consecutive sessions before Friday’s rebound as expectations for a ceasefire improved. Even after the recovery, both benchmarks were still on track for weekly losses of about 6%, showing that oil has been swinging between hopes of de-escalation and renewed concern over the security of shipping through the Gulf.
U.S. inventory data adds support
U.S. supply data also offered support to prices. The latest weekly petroleum report showed U.S. commercial crude inventories, excluding the Strategic Petroleum Reserve, fell by 2.3 million barrels to 457.2 million barrels in the week ended May 1. Motor gasoline inventories dropped by 2.5 million barrels, distillate fuel inventories fell by 1.3 million barrels and total commercial petroleum inventories declined by 5.9 million barrels. Refinery inputs averaged 16.0 million barrels a day, with utilization at 90.1% of operable capacity.
Over the past four weeks, total products supplied averaged 20.3 million barrels a day, up 2.6% from a year earlier, while gasoline demand rose 1.0% and distillate demand increased 3.5%, according to the same report. Those figures reinforced the market’s focus on both geopolitical risk and near-term U.S. fuel balances as trading closed out the week. Friday’s rise left crude well above levels seen before the latest exchange of fire, even as the contracts remained set for a weekly decline. – By Content Syndication Services.