Oil prices were headed for a weekly gain on Friday as attacks on ships around the Strait of Hormuz heightened concerns over Middle East supplies, while a larger-than-expected drawdown in US crude inventories lent further support to the market.
Brent crude was up 2.1% at $108.04 a barrel. Earlier in the session, Brent futures were little changed at $105.92 a barrel, while US West Texas Intermediate (WTI) crude slipped 22 cents, or 0.2%, to $97.75 at 1:11 p.m. GMT, according to Reuters.
Brent has gained 1.2% so far this week, while WTI has advanced 6.5%, putting both benchmarks on track for weekly gains amid continued uncertainty over global oil supplies.
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"The relative stability reflects a market caught between persistent supply disruption risks in the Middle East, where attacks on ships in and around the Strait of Hormuz continue to underpin prices," Saxo Bank analyst Ole Hansen said.
Supply concerns have intensified as attacks around the Strait of Hormuz have increased over the past 10 days. Iran has said it is stepping up strikes in response to the US blockade of its ports and tougher sanctions introduced last month.
The waterway is a critical route for global oil shipments, making disruptions to shipping and crude flows a key concern for energy markets.
Kpler analysts said in a report on Thursday that intensified Iranian attacks had driven Gulf crude flows sharply lower. They expect the recovery in shipments through the Strait of Hormuz to be slower and more uneven without a comprehensive political agreement.
US crude prices also received support after WTI settled more than 3% higher on Thursday, following a larger-than-expected decline in crude inventories.
The drawdown came as hurricane-related production shut-ins affected US output, adding to concerns over near-term supply availability.
However, expectations of additional fuel supplies have offered some relief to the market. The International Energy Agency (IEA) agreed on Thursday to release more than 20 million barrels of diesel, pushing European diesel refining margins nearly 2% lower on Friday to $78.67 a barrel.
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Hansen said the IEA's commitment to release the remaining 100 million barrels under its March agreement could weigh slightly on market sentiment, although the move is unlikely to ease tightness in diesel supplies.
Washington is also considering easing sanctions on some so-called shadow fleet vessels that have transported oil and petroleum products from Russia, Iran and Venezuela. The move aims to reduce record-high global freight rates.
The discussions follow US President Donald Trump's temporary lifting of sanctions on Russian diesel fuel, a decision criticised by Ukrainian President Volodymyr Zelenskiy, several European countries and some Republican lawmakers.
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