Oil prices rise as Hormuz closure, US-Iran tensions keep markets on edge

Oil prices edged higher on Friday as the continued closure of the Strait of Hormuz and escalating maritime tensions between the US and Iran kept global energy markets on edge, despite a fresh extension of the Israel-Lebanon ceasefire.

International benchmark Brent crude futures rose 0.63% to $105.73 per barrel as of 0545GMT, while US benchmark West Texas Intermediate (WTI) gained 0.32% to $96.17.

The gains came as the Middle East conflict continued to stoke fears over energy supply, with both the US and Iran seizing ships while naval blockades kept the Strait of Hormuz shut.

Around 20 million barrels of oil and petroleum products moved through the strait every day before the war, making it one of the world’s most critical energy chokepoints.

Prices rose despite US President Donald Trump saying Thursday that Israel and Lebanon had agreed to extend their ceasefire following a White House meeting with senior US officials.

“The Meeting went very well!” Trump said on his Truth Social platform, announcing the extension.

The ceasefire, initially set to last 10 days, is expected to give more time for diplomatic talks, while Washington also pledged support to strengthen Lebanon’s defenses against Hezbollah.

However, the US-Iran ceasefire has not restored normal traffic through Hormuz, as the conflict has shifted into naval blockades, with both sides seeking economic leverage for a broader settlement.

International Energy Agency Executive Director Fatih Birol warned Thursday that the world is facing an unprecedented energy security threat due to the Hormuz closure and wider disruptions.

“We are facing the biggest energy security threat in history,” Birol told CNBC on Thursday. “As of today, we’ve lost 13 million barrels per day of oil ... and there are major disruptions in vital commodities,” he said.

Birol has previously warned that the Iran war and the ongoing closure of the Strait of Hormuz could trigger “the largest energy crisis we have ever faced,” urging governments to strengthen resilience through alternative energy sources.