Oil prices advanced more than 2% in Asian trade on Friday after U.S. and Iranian forces exchanged fire near the Strait of Hormuz, despite President Donald Trump insisting a month-old ceasefire remained in effect.

As of 20:05 ET (00:05 GMT), Brent Oil Futures expiring in July rose 2.1% to $103.37 per barrel, while West Texas Intermediate (WTI) crude futures climbed 2.2% to $96.90 per barrel.

Oil had settled about 1% lower on Thursday after a volatile session. 

The gains came after Iran accused the United States of targeting an Iranian oil tanker and another vessel entering the Strait of Hormuz, as well as carrying out strikes on Qeshm Island and nearby coastal areas.

The U.S. military said it had acted in self-defence after Iranian drones, missiles, and small boats targeted three U.S. Navy destroyers transiting the strategic waterway. Washington said no U.S. assets were hit.

Trump sought to calm markets, describing the confrontation as “just a love tap” and telling ABC News that the ceasefire with Iran was still holding. Iranian state media later reported that conditions had returned to normal in affected areas.

Still, traders remained on edge over the risk of escalating conflict around the Strait of Hormuz, through which roughly a fifth of global oil and LNG supplies pass.

The latest flare-up marked the most serious breach yet of the fragile ceasefire brokered in April after weeks of conflict between Washington and Tehran. Diplomatic efforts led by Pakistan to secure a broader agreement remain underway.

The geopolitical tensions also lifted the U.S. dollar and pressured equity futures, with investors shifting toward safe-haven assets ahead of the closely watched U.S. non-farm payrolls report later on Friday.

Source: Investing.Com 

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