Key Takeaways

• Friday rebound: Brent crude rose 0.7% to $100.72 per barrel, while WTI added 0.4% to $95.19.
• Early surge: Both contracts jumped as much as 3% in early Asian hours on news of renewed U.S.-Iran fighting.
• Brutal week: Oil is still on track for a 7% weekly decline as peace deal hopes dominate the bigger picture.
• Hormuz showdown: Iran accused the U.S. of targeting an Iranian oil tanker and another vessel, plus strikes on Qeshm Island and coastal areas.
• U.S. self-defense claim: Washington said its forces acted defensively after Iranian drones, missiles, and small boats targeted three U.S. Navy destroyers.
• No U.S. casualties: Washington reported no American assets were hit.
• “Just a love tap”: Trump downplayed the clash and insisted the April ceasefire still holds.
• Iran de-escalates rhetoric: State media reported conditions had returned to normal in affected areas.
• ING’s view: Analysts say oil “is likely to remain highly headline-driven,” with the escalation reinforcing risk premium.
• Pakistan diplomacy: Mediated efforts to secure a broader agreement continue in the background.
• Most serious breach yet: The exchange marked the gravest violation of the fragile ceasefire brokered in April.
• Jobs data ahead: Investors remain cautious before the U.S. non-farm payrolls report.

Oil prices climbed on Friday following a tense exchange of fire between U.S. and Iranian forces near the Strait of Hormuz, although President Donald Trump insisted a month-old ceasefire remained in effect — with Brent still holding above the $100-per-barrel mark.

As of 06:11 ET (11:11 GMT), Brent oil futures gained 0.7% to $100.72 per barrel, while West Texas Intermediate (WTI) crude futures rose 0.4% to $95.19 per barrel.

Both contracts jumped as much as 3% in early Asian hours after the news of renewed U.S.-Iran fighting broke.

Oil was nonetheless set for a 7% weekly decline as Washington and Tehran signaled that a peace agreement could be drawing near.

Hormuz Tensions Reignite

Geopolitical tensions ratcheted higher after Iran accused the United States of targeting an Iranian oil tanker and another vessel entering the Strait of Hormuz, as well as carrying out strikes on Qeshm Island and nearby coastal areas.

The U.S. military said it had acted in self-defense after Iranian drones, missiles, and small boats targeted three U.S. Navy destroyers transiting the strategic waterway. Washington said no U.S. assets were hit during the exchange.

Trump sought to calm markets, describing the confrontation as “just a love tap” and telling ABC News that the ceasefire with Iran was still holding. Iranian state media later reported that conditions had returned to normal in the affected areas.

Still, traders remained on edge over the risk of escalating conflict around the Strait of Hormuz, through which roughly a fifth of global oil and LNG supplies pass.

“Looking ahead, oil prices are likely to remain highly headline‑driven, with the recent escalation reinforcing the risk premium,” ING analysts said in a research note.

The latest flare-up marked the most serious breach yet of the fragile ceasefire brokered in April after weeks of conflict between Washington and Tehran.

Diplomacy Continues Behind the Scenes

The exchange of fire occurred as Washington awaited Iran’s response to the latest peace proposal. Reports indicated that diplomatic efforts led by Pakistan to secure a broader agreement remain underway.

Investors were also cautious ahead of the closely watched U.S. non-farm payrolls report due later on Friday.