Oil prices rise as US threatens 'indefinite' naval blockade on Iran
- Last updated: August 14, 2026 | 11:27
The United States on Thursday said that it could maintain a naval blockade of Iran indefinitely and would ratchet up economic pressure on Tehran as ceasefire talks have floundered, global oil supply is dropping and regional tensions are rising.
Oil prices rose on Friday and were on track for weekly gains after the United States threatened an indefinite naval blockade of Iran, raising concerns about disruptions to crude supplies from the Middle East.
Brent futures were up $1.43, or 1.64%, to $88.50 a barrel at 0810 GMT, while US West Texas Intermediate crude futures were up $1.56, or 1.92%, to $82.81 a barrel.
Higher oil prices are a natural result of the latest approach by the US, which implies a substantial extension of the trouble in the Middle East with little hope of a near-term resolution, said Bjarne Schieldrop at SEB Research.
Defence Secretary Pete Hegseth told reporters that the US military has the capability to maintain a naval presence in the region to enforce its blockade of Iran, which has inflicted severe economic damage on the country.
"Indefinitely the United States Navy can maintain a blockade like that because we'll rotate ships in and out, as we have, and we'll continue to," Hegseth told reporters during a trip to Panama.
Treasury Secretary Scott Bessent said on Thursday that the United States planned to inflict more financial damage on Iran.
"Watch this space for more announcements coming next week because we are going to apply measures like have never been seen in the history of economic isolation on a country," he said in an interview on Newsmax's "Rob Schmitt Tonight" programme.
With a tentative June deal to end the war in tatters, Iran has sought to exert leverage on Washington in return by controlling the Strait of Hormuz.
It has attacked some vessels trying to transit the strategic waterway, through which a fifth of the world's oil and liquefied natural gas travelled before the war began in February.
Two vessels from the state-owned Abu Dhabi National Oil Company were attacked transiting the strait on Thursday evening, UAE state news agency WAM reported. The United Arab Emirates government condemned it as an Iranian attack.
US President Donald Trump is under pressure at home to end a war that is deeply unpopular, with high fuel prices dragging down his approval ratings and potentially eroding his party's control of Congress in midterm elections in November.
Trump has repeatedly asserted that the US has "total control" over the strait, prompting Iranian denials. Tehran has said it will not allow the waterway to reopen until its conditions are met. These include removing economic sanctions and releasing frozen Iranian assets.
Shipping traffic through the Strait of Hormuz fell to eight vessels on Tuesday, compared with a 10-day average of about 12 vessels, and 130 to 140 ships before the war.
The US lifted its blockade of Iran's shipping and ports for a month in mid-June but has since reimposed it, cutting off Tehran's primary source of hard currency and compounding earlier losses from wartime strikes on its energy infrastructure.
Washington previously said it would lift the Iranian blockade once Iran and Oman, which sit on either side of the strait, reach an agreement to restore commercial shipping.
'Global oil supply will fall by 4.3 million barrels per day'
Trump has also repeatedly threatened to escalate military strikes and "hit Iran hard," although he has thus far resisted deploying ground troops or seizing strategic islands and bombing desalination plants. Earlier this week, Trump suggested he would rely on economic means, rather than military action.
The US has tightened economic sanctions against Iran and other individuals and entities that it says are helping it procure weapons, but the pressure campaign has failed to bring Tehran back to the negotiating table.
Stress is mounting on the global economy. The International Energy Agency on Wednesday forecast that global oil supply would fall by 4.3 million barrels per day, or around 4%, this year.
Just a month ago, the agency had forecast a drop of 3.7 million barrels per day.
Oil prices settled down more than 2% on Thursday after a week of gain, as investors focused on signs of weaker global demand and a sharp increase in U.S. crude inventories.
But reports that Yemen's Iran-backed Houthis had targeted a Saudi Aramco refinery with drones unsettled the market, renewing concerns about a widening regional war.
Global economists have forecast a sharp drop in global growth as a result of the war, and potentially a swing into recession in some areas, warning that the impact will grow if the war is not ended soon.
Hegseth declined to comment on a question about whether, in retrospect, it was a mistake to declare a ceasefire in April, a move that ended high-tempo bombing of Iran in exchange for peace negotiations that have failed to resolve the conflict.
"I'm never going to comment on that. We're doing exactly what we need to, to ensure that Iran never has a nuclear weapon," Hegseth said.
Reuters