Oil prices rise as U.S.-Iran hostilities threaten Strait of Hormuz supply
Oil prices rose Friday as investors weighed escalating hostilities between the United States and Iran, which threaten crude supply routed through the Strait of Hormuz. Traders are pricing in the risk of disruption to regional shipments.
Brent and WTI crude futures climbed on Friday as investors grew concerned that military tensions between the United States and Iran could disrupt shipments through the Strait of Hormuz, the channel that carries roughly a fifth of the world's oil. Analysts say any disruption to traffic through the strait could cause a sharp tightening in global supply.
Market participants are closely watching how the confrontation develops and whether further escalation would push energy prices higher still. Some shipping firms have already begun reassessing routes and insurance costs because of the regional tension.
Energy analysts say a full closure of the strait remains seen as unlikely for now, but the risk is already being priced into the market. The developments could also weigh on the global inflation outlook in the coming weeks.
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