Oil prices headed for weekly gains as of Friday, despite the US trying to ease supply concerns by issuing a 30-day licence for countries to buy Russian oil and petroleum products stranded at sea.
Brent futures for May rose $1.02, or one per cent, to $101.48 a barrel at 07:30 GMT, heading for a weekly increase of nearly 10 per cent. US West Texas Intermediate (WTI) crude for April was up by 94 cents, or 1.0 per cent, at $96.67 a barrel, poised for more than a six per cent uptick for the week.
The licence was issued in what Treasury Secretary Scott Bessent said was a step to stabilise global energy markets roiled by the US-Israeli war on Iran, but analysts said this has failed to resolve wider supply constraints.
"ICE Brent futures have already breached $100 per barrel and are still supported today, despite moves to calm the markets with the Russian oil waiver and the unprecedented release of emergency stockpiles," said Emril Jamil, senior analyst at LSEG.
"The market sees this as a short-term solution that does not address the crux of the supply disruption. The crude intermonth spreads for future months indicate an unresolved and continued tightness in supply," Jamil said.
Brent is more supported than WTI as Europe is more susceptible to energy security issues, while the US is able to stave off its exposure due to its domestic output, Jamil said.
Yang An, analyst at Haitong Futures, said: "Issuing the licence has eased market concerns, but it won't resolve the most fundamental issue. The most important thing is the restoration of navigation in the Strait of Hormuz."
The announcement on Russian oil came a day after the US Energy Department said the US would release 172 million barrels of oil from its Strategic Petroleum Reserve to help curb skyrocketing oil prices.
That plan was coordinated with the International Energy Agency, which has agreed to release a record 400 million barrels of oil from strategic stockpiles, including the US contribution.
Fleeting relief sparked by the IEA release, however, was shattered by a re-escalation of Middle East risks, IG analyst Tony Sycamore said in a note.
Both benchmark prices surged more than nine per cent on Thursday and hit their highest levels since August 2022.
Iran's new supreme leader Mojtaba Khamenei said Iran would fight on and keep the Strait of Hormuz shut as leverage against the US and Israel.
Two fuel tankers in Iraqi waters were struck by explosive-laden Iranian boats, Iraqi security officials said on Thursday. An Iraqi official told state media that the country's oil ports have completely stopped operations.
Meanwhile, US Treasury Secretary Scott Bessent told Sky News in an interview that the US Navy, perhaps with an international coalition, would escort vessels through the Strait of Hormuz when it is militarily possible.
(Reporting by Jeslyn Lerh in Singapore, Sam Li and Lewis Jackson in Beijing; Editing by Tom Hogue and Thomas Derpinghaus)