Live updates: Follow the latest news on US-Iran war
Oil prices fluctuated on Friday but were on track for their first monthly increase since April, as shipping traffic improved in a regional energy chokepoint and uncertainty over US-Iran talks kept markets on edge.
Energy intelligence firm Kpler said 25 ships sailed through the Bab Al Mandeb strait, the gateway to the Red Sea, despite a "maritime embargo" on Saudi Arabia declared by Yemen's Houthi rebels.
But traffic slowed further in the Strait of Hormuz, which accounted for about a fifth of the world's energy exports before the Iran war started.
Only two vessels transited the waterway, Kpler data shows. On Thursday, Qatar was able to send its first shipment of liquefied natural gas through the strait after one of its tankers was attacked more than three weeks ago, ship tracking data showed.
On Friday, two ships were hit in the strait, while four others turned back, Iran's Islamic Revolutionary Guard Corps said. It claimed the vessels were sailing in an "undeclared route" escorted by the US and "without paying attention to our warnings".
Meanwhile, uncertainty remains over whether Washington and Tehran will agree to a new deal. Israeli Prime Minister Benjamin Netanyahu visited US President Donald Trump at the White House this week to discuss their next steps on the conflict.
As the war expands, Saudi Arabia proposed a maritime defence coalition involving dozens of countries to protect Red Sea trade routes from attacks by Iran's allies.
The week's events caused crude prices to see-saw, but the market calmed on Friday after huge swings in previous days.
Brent, the benchmark for two thirds of the world's oil, was up 1.53 per cent at $90.39 a barrel at 4.57pm UAE time. West Texas Intermediate, the gauge that tracks US crude, added 2.21 per cent to $85.44 per barrel. Both were shifting in and out of the red earlier in the day.
From last week's close, Brent and WTI are on track to decline by more than 7 per cent and 6 per cent, respectively. On a monthly basis, both benchmarks are on pace to jump by about 22 per cent.
The "routes to a deal" between the US and Iran are "far from obvious", even if both sides have plenty of motivation to grind out a deal, said Alan Gelder, head of macro oils research at UK research firm Wood Mackenzie.
"For Iran, economic pressures will mount now export revenue allowed under the MoU have been lost," he said, referring to the preliminary agreement between Washington and Tehran that was nullified when hostilities resumed.
"For the US, geopolitics is one thing, notably intensifying pressure from trade partners that are big hydrocarbon importers smarting from high oil and LNG prices. But the bigger issue – for politicians, at least – is domestic: specifically, prices at the pump."
The market will also factor in Sunday's Opec+ meeting. The group is expected to pause planned output increases in September.
This month, the seven core members of the group – Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman – agreed to raise production levels for a fifth straight month in August, noting that they remain committed to supporting oil market stability.
The suspension would keep about two million barrels per day of cuts in place beyond September while the group discusses new quotas that are to take effect in January, sources told Reuters.
The sources added that they do not expect additional production rises for the rest of the year, although no final decision has been made.
Gold, meanwhile, was also on track to post a monthly gain after market watchers lowered expectations for an interest rate increase from the US Federal Reserve. The Fed, in a split decision on Thursday, kept its benchmark rate unchanged at between 3.50 and 3.75 per cent, amid rising oil prices and a new round of tariffs that threaten to increase consumer prices.
Gold, widely regarded as a hedge against inflation, was down 1.12 per cent to $4,055.09 an ounce, but still on pace to add about 0.7 per cent this month.
