Oil prices rose Friday as the Middle East conflict continues to stoke energy worries, with both the U.S. and Iran seizing ships as the Strait of Hormuz stays shut.
International benchmark Brent crude rose more than 1.25% to $105.38 per barrel in Friday trading, while U.S. West Texas Intermediate futures advanced 1.14% to $96.96 per barrel.
Prices rose even as Israel and Lebanon agreed to prolong their truce following a meeting at the White House with senior U.S. officials, President Donald Trump said Thursday. "The Meeting went very well!" Trump posted on Truth Social, announcing the extension.
The ceasefire, initially set to last 10 days, will now give more time for diplomatic negotiations, with Washington also pledging support to bolster Lebanon's defenses against Hezbollah.
While the ceasefire between the U.S. and Iran has held, the conflict has evolved into naval blockades keeping the vital Hormuz Strait closed, as both attempt to gain economic leverage to secure a deal favorable to their interests.
"The longer the strait remains closed, the greater the economic costs â raising the likelihood that one side will be forced to back down" Commonwealth Bank of Australia wrote in a note published Friday.
About 20 million barrels of oil and petroleum products were shipped every day through the strait before the war.
"We judge the U.S. will be the first to back down because of mounting political and economic costs. But there remains a risk of major military escalation that would significantly push up the U.S. dollar," the analysts wrote.
Fatih Birol, head of the International Energy Agency, told CNBC on Thursday that "We are facing the biggest energy security threat in history."
"As of today, we've lost 13 million barrels per day of oil ... and there are major disruptions in vital commodities," he told Steve Sedgwick virtually at CNBC's CONVERGE LIVE in Singapore.
Birol has previously warned that the Iran war and ongoing closure of the Strait of Hormuz would result in "the largest energy crisis we have ever faced" and urged governments to bolster their resilience with alternative energy sources.
â CNBC's Holly Ellyatt contributed to this report.
