Oil heads for weekly gains as Hormuz impasse deepens

Oil prices rose on Friday and were on track for weekly gains of nearly 5–6% as the ongoing Strait of Hormuz crisis continued to disrupt global energy flows, with Asian refiners scrambling for alternative crude supplies and European natural gas posting its sharpest weekly rally since late July.

US Threatens Indefinite Blockade as Oil Gains Hold

Brent and WTI crude futures were headed for weekly gains after the United States threatened an indefinite naval blockade of Iran, according to Reuters. Both benchmarks had gained more than 1.5% in early European trading on Friday, with analysts at MUFG noting that "the lack of a durable Hormuz agreement and continued threats across both Hormuz and the Red Sea should keep a sizeable geopolitical premium embedded in oil prices," according to Barron's.whbl+2

Shipping traffic through the Strait of Hormuz fell below the monthly average toward the end of the week as competing U.S. and Iran claims over control of the waterway persisted. The strait has been largely blocked since late February 2026, when the United States and Israel launched an air campaign against Iran. Hopes for a diplomatic resolution have repeatedly collapsed, most recently after President Donald Trump introduced counter-demands including financial compensation from Tehran.investing+3

Asian Refiners Pivot to US Crude

At least four Asian refiners purchased U.S. crude this week to replace disrupted Middle Eastern supplies, Reuters reported. South Korea's GS Caltex bought two million barrels of Mars crude from Shell ↘ 0.21% for November arrival at a premium of around $13–14 per barrel above the October Dubai benchmark. Japan's Cosmo Energy bought Mars crude from Trafigura, while Eneos, Japan's largest refiner, purchased two million barrels of WTI from Trafigura at a premium exceeding $10 per barrel.thehindubusinessline+1

Taiwan's state-owned CPC Corp secured two million barrels of WTI at $8–9 above Dated Brent, alongside West African cargoes. Asia imported a record 2.35 million barrels per day of U.S. crude in July, according to ship-tracking firm Kpler. India's Hindustan Petroleum and Mangalore Refinery also issued tenders seeking spot crude.thehindubusinessline

European Gas Surges on Supply Fears

European natural gas benchmarks posted their strongest weekly gains since late July, with the British front-month contract surging nearly 10% to around 145 pence per therm and Dutch front-month futures climbing almost 9% to near 59.50 euros per megawatt-hour. The rally was driven by curtailed Qatari LNG deliveries to European terminals, forcing utilities to compete for spot cargoes during a critical storage-filling period. EU underground gas storage stands at just 59% of working capacity — roughly 12 percentage points below last year's level and well under the five-year seasonal average, according to Gas Infrastructure Europe data.investing