Crude prices rise as Strait of Hormuz shipping near standstill

Oil prices rose on Friday, July 10, and were set for solid weekly gains amid renewed concerns over supply disruptions in the Middle East, after fresh fighting between the United States and Iran curtailed shipping through the Strait of Hormuz.

Brent crude futures climbed 19 cents, or 0.25%, to $76.49 a barrel by 0319 GMT, while U.S. West Texas Intermediate (WTI) crude gained 19 cents, or 0.26%, to $72.27. For the week, Brent was on track to rise by about 6%, with WTI heading for a 5% increase, as per figures obtained by Reuters.

"Prices have backed off the mid-week highs, but there is still a substantial risk premium as Hormuz transits are back to a near-standstill with no clear signs on when normal reopening might resume," said Vandana Hari, founder of oil market analysis provider Vanda Insights. "However, it looks like market confidence in the U.S. and Iran returning to diplomacy to resolve the issue is capping the upside," Hari added.

The renewed tensions follow Iranian armed forces launching attacks on U.S. military infrastructure in Gulf states on Thursday, in response to U.S. strikes targeting Iran’s southern coastal and eastern provinces. The escalation has further strained a three-week-old ceasefire. Separately, Iranian media reported multiple explosions across southern Iran, including in Bushehr, home to one of the country’s nuclear power plants.

The latest hostilities come after the funeral of Iran’s slain supreme leader, Ayatollah Ali Khamenei, who was killed on the first day of the war on February 28. His burial marked the culmination of a week of mass funeral processions and rallies.

The renewed fighting has delayed the full reopening of the Strait of Hormuz, a critical chokepoint that previously accounted for roughly 20% of global daily oil and gas flows. Tanker traffic through the strait was near a standstill on Thursday, according to ship-tracking data, as vessel operators reassessed security risks following recent strikes. The disruption followed an incident in which Iran targeted a Qatari liquefied natural gas (LNG) vessel exiting the waterway near Oman.

Despite the escalation, U.S. President Donald Trump said on Wednesday, July 8, that he did not expect the situation to evolve into a prolonged conflict, stating that "anything that happens is going to be over very quickly."

"Despite the U.S. 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 Daniel Hynes, senior commodity strategist at ANZ Bank. "This was aided by comments from President Trump, who said he doesn’t expect a return to a full-scale conflict."

By Tamilla Hasanova