Oil steadied after surging more than 3% on Thursday as traders weighed US President Donald Trump's threats against Iran, and how a potential escalation in hostilities could impact flows from the Middle East.
West Texas Intermediate was near $66 a barrel after a three-day rally — aided in part by a weaker dollar — while Brent settled above $70 for the first time since July. Trump warned of military strikes if Iran doesn't make a nuclear deal, injecting a fresh risk premium into prices.
Market concerns are primarily focused on how any fallout from an escalation in tensions could impact shipping through the Strait of Hormuz, a passage that separates Iran and the Arabian peninsula. Tankers carrying crude and liquefied natural gas transit through the strait daily to deliver cargoes worldwide.
The Associated Press reported that Iran issued a warning to ships at sea on Thursday that it planned to run a drill on Sunday and Monday that would include live firing in the strait, citing two Pakistani security officials.
Prices
- WTI for March delivery rose 0.3% to $65.61 a barrel at 7:38 a.m. in Singapore.
- Brent for March settlement closed 3.4% higher to settle at $70.71 a barrel on Thursday.
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