Oil prices rose on Friday after Iran fired another missile at the United Arab Emirates and the United States attacked two Iranian tankers as they tried to evade a naval blockade.
Brent crude oil futures, the international standard, rose about 1% to close at $101.29 per barrel. US West Texas Intermediate futures settled slightly higher at $95.42 per barrel.
But the two oil contracts posted losses of more than 6% for the week as markets expected a deal to end the war.
The UAE Ministry of Defense announced on Friday that the country’s air defense forces engaged two ballistic missiles and three drones fired from Iran. This is at least the second time this week that Iran has opened fire on the UAE.
Meanwhile, the US Central Command said in a statement that US forces on Friday opened fire on two empty Iranian oil tankers, M/T Sea Star III and M/T Sevda, which violated the blockade. Centcom said a Navy fighter jet fired into the ship’s smokestack, causing it to malfunction.
The United States and Iran engaged in a gunfight in the Strait of Hormuz on Thursday. Three American destroyers were attacked by Iranian missiles, drones and small boats as they passed through Hormuz and entered the Gulf of Oman, Centcom said. No warships were hit and U.S. forces had eliminated the threat, Centcom said.
Meanwhile, President Donald Trump insisted in a phone call with an ABC News reporter late Thursday that the ceasefire with Iran remains in effect. He said the strike was “just a tap of love.”
The attack came as Iran considered U.S. proposals to end the war. Secretary of State Marco Rubio said the U.S. looks forward to a response on Friday.
Crude oil prices since the beginning of the year
ANZ Research said in a note that oil prices have been on a roller coaster ride amid doubts over peace talks.
“The oil market is likely to remain volatile due to the risk that the proposed US peace deal will collapse,” ANZ experts said.
Citi analysts expect financial markets to remain generally stable despite recent instability related to the Middle East, but the bank warned that the path to normalization is unlikely to be smooth and oil prices may continue to rise in the coming months.
—CNBC’s Kevin Breuninger contributed to this report.
