Oil prices rose on Friday and were headed for a weekly gain as supply disruptions continued, with no breakthrough in sight for ending the Iran war and reopening the Strait of Hormuz.
Brent, the benchmark for two-thirds of the world's oil, was trading 1.57 per cent higher at $107.4 a barrel at 11.38am UAE time. West Texas Intermediate, the gauge that tracks US crude, was up 1.93 per cent to $103.1 a barrel.
“Oil prices moved toward a weekly gain as the Strait of Hormuz remained affectively closed, prolonging disruptions to global energy supplies and keeping markets on edge,” said MUFG research analyst Soojin Kim.
“Despite a ceasefire formally remaining in place since early April, tensions between the US and Iran continue with little progress toward a lasting agreement, while a US naval blockade of Iranian ports remains active and shipping conditions in the Gulf stay highly volatile.”
US Present Donald Trump increased pressure on Iran to reach a diplomatic deal to end the war and reopen the strait, a key waterway through which more than 20 per cent of global crude and LNG supplies is shipped.
"I am not going to be much more patient," Mr Trump told Fox News in an interview. "They should make a deal."
He also suggested hunting down Iran's enriched uranium.
“The other thing we could do is bomb it again,” Mr Trump said. “But I, just, I would feel better getting it, and we will get it.”
The US President, who met China's President Xi Jinping in Beijing this week, said the Chinese leader offered to help with Iran, although this was not confirmed by the Chinese side.
China is a major buyer of Iranian oil and has strong relations with Tehran.
Oil prices have been trading at elevated levels since the start of the war on February 28, with the strait effectively blocked by Tehran. Most ships are avoiding passing through the waterway as a safety measure, with hundreds of ships stuck in Arabian Gulf waters.
"Energy prices will likely remain elevated given the little progress made in Middle East talks in the short run," said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank.
The International Energy Agency also warned this week that global oil markets could remain “severely undersupplied” until October even if the war ends next month, as flows through Hormuz have fallen sharply and only limited tanker traffic has resumed.
The prolonged supply shock is also adding to inflation concerns globally as energy inventories continue to tighten, Ms Kim added.
US commercial crude oil inventories decreased by 4.3 million barrels for the week ending May 8, compared to the previous week, according to a report from the Energy Information Administration.
