Oil prices jumped more than 3% on Friday after public statements by US President Donald Trump and Iran’s foreign minister dented hopes of a near-term deal to end ship attacks and seizures around the Strait of Hormuz, Reuters reported.
Brent crude futures settled at $109.26 a barrel, up $3.54 or 3.35%. US West Texas Intermediate finished at $105.42, up $4.25 or 4.2%. Over the week, Brent climbed 7.84% and WTI 10.48% — the sharpest weekly gains since the ceasefire took hold.
Iran has “no trust” in the United States and will only negotiate if Washington is serious, Foreign Minister Abbas Araqchi said, adding that Iran is prepared to return to fighting but also prepared for diplomatic solutions. Trump said he was running out of patience with Tehran and that he and Chinese President Xi Jinping had agreed that Iran must not be allowed to acquire a nuclear weapon and that the strait must reopen.
“The tone between the US and Iran has once again become significantly more confrontational. While the ceasefire holds, hopes for a swift reopening of the Strait of Hormuz have faded,” Commerzbank analysts said. About a fifth of global oil and liquefied natural gas normally transits the chokepoint.
Iran’s Revolutionary Guards said 30 vessels had crossed between Wednesday evening and Thursday — well short of the 140-per-day pre-war norm but an increase. Shipping analytics firm Kpler said 10 ships had transited in the past 24 hours, compared with five to seven daily in recent weeks.
“The world has consumed its oil safety net at a historic rate,” Phil Flynn of Price Futures Group wrote. “A prolonged closure of the Strait of Hormuz points toward tighter physical markets, potential refined product shortages, and upward pressure on prices in the coming weeks and months.”
Trump also said China wants to buy US oil and that he could lift sanctions on Chinese refiners purchasing Iranian crude. Saxo Bank’s Ole Hansen attributed Friday’s move to the Trump-Xi summit failing to produce a Hormuz breakthrough as well as continued Ukrainian attacks on Russian refineries.
The price surge directly raises Sri Lanka’s fuel import bill. Ceylon Petroleum Corporation has been absorbing premiums of Rs.720 per litre on diesel imports against a retail price near Rs.392, with the government signalling fuel stocks secured until August and the IMF mission tying the next $700 million tranche to cost-recovery pricing.
