By: Economy Middle east

Oil prices climbed more than 1 percent on Friday as renewed clashes between the U.S. and Iran raised concerns over the stability of a fragile ceasefire, weakening expectations for progress toward reopening the Strait of Hormuz, a vital route for global oil and gas shipments.

By 4:12 GMT, Brent crude futures gained $1.11, or 1.11 percent, to reach $101.2 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures advanced $1.85, or 1.95 percent, to $96.66 per barrel.

Earlier in the session, both benchmarks had surged more than 3 percent at the market open.

Oil prices end three-day losing streak

The latest rebound in oil prices ended a three-day losing streak driven by reports earlier this week that the U.S. and Iran were nearing an agreement to halt the conflict and fully reopen the Strait of Hormuz, while postponing broader disputes surrounding Iran’s nuclear program.

Despite Friday’s gains, both oil benchmarks remain on track to post weekly losses of around 6 percent.

The latest surge in oil prices came after Iran accused the U.S. of breaching the month-long ceasefire, while Washington said its strikes were carried out in response to Iranian attacks on U.S. naval vessels passing through the strait on Thursday.

Iran’s military claimed the U.S. targeted an Iranian oil tanker, another vessel and civilian areas both in the Strait of Hormuz and on the mainland.

Despite rising tensions, U.S. President Donald Trump told reporters later on Thursday that the ceasefire remained in place.

The exchange of fire came as Washington awaited Iran’s response to the latest peace proposal, which left several major points unresolved, including the U.S. demand for the reopening of the Strait of Hormuz, a passage that previously handled around one-fifth of the world’s oil and gas supply before the outbreak of the conflict.

The waterway has remained largely closed since the war, which also involved Israeli strikes, began on February 28.

U.S. crude and fuel inventories fall

Markets remained highly sensitive to developments surrounding the Strait of Hormuz. Capping gains in oil prices this week, however, were fresh U.S. inventory data from the Energy Information Administration showing another decline in crude stockpiles.

The EIA said U.S. commercial crude inventories, excluding the Strategic Petroleum Reserve, dropped by 2.3 million barrels in the week ended May 1 to 457.2 million barrels. Analysts had forecast a steeper decline of 3.4 million barrels.

Gasoline inventories decreased by 2.5 million barrels, while distillate stocks, including diesel and heating oil, fell by 1.3 million barrels.

The report also pointed to robust petroleum exports, highlighting sustained global demand for U.S. energy supplies as disruptions to Middle East oil flows persist.