Oil Prices Rise Amid Strait of Hormuz Tensions and U.S.-Iran Talks

Oil prices climbed during Asian trading on Friday, building on Thursday's modest recovery, as markets remained on edge over ongoing supply disruptions in the Middle East and closely watched diplomatic developments ahead of planned U.S.-Iran negotiations this weekend.

Brent crude futures for June delivery rose 0.8% to $96.70 per barrel as of 8:45 PM ET, while West Texas Intermediate (WTI) crude gained 0.7% to reach $98.52 per barrel. Despite the uptick, both benchmarks remained on track for weekly losses exceeding 10%, reflecting the broader volatility gripping energy markets.

The primary driver behind the price support is the continued disruption to tanker traffic through the Strait of Hormuz, a critical chokepoint responsible for roughly 20% of the world's oil supply. Earlier in the week, crude prices had dropped sharply after President Donald Trump announced a two-week ceasefire with Iran, contingent on restoring Hormuz shipping lanes. Market optimism quickly faded, however, when Israel launched airstrikes on Lebanon shortly after the truce was declared, claiming its conflict with Hezbollah fell outside the agreement's scope. Iran responded by halting tanker passage through the strait once more, citing the Israeli strikes as a ceasefire violation.

Israel subsequently signaled a willingness to open direct diplomatic talks with Lebanon, offering a faint glimpse of de-escalation. Still, investor confidence remains fragile, with crude markets reacting sharply to every headline surrounding the ceasefire's uncertain status.

President Trump intensified pressure on Tehran, warning Iran not to impose transit fees on vessels using the strait and criticizing the country's management of energy flow. Meanwhile, a growing backlog of tankers and limited marine insurance coverage continue to weigh heavily on any meaningful recovery in oil shipments through the region.