Oil prices rose during Friday's Asian trade and were on track to post solid weekly gains as investors continued to price in the risk of supply disruptions from the Middle East following renewed military clashes between the United States and Iran.
By 3:10 pm AEST (5:10 am GMT), Brent crude futures had risen 19 cents, or 0.3%, to US$76.49 a barrel, while U.S. West Texas Intermediate (WTI) crude gained 16 cents, or 0.2%, to US$72.24 a barrel.
For the week so far, Brent has gained 6.2%, while WTI is up 5.4%.
ANZ analysts said shipping activity through the Strait of Hormuz remained heavily constrained despite last month's ceasefire agreement.
"Traffic through the Strait of Hormuz remained severely restricted as the two sides exchanged strikes that were some of the heaviest since reaching a ceasefire agreement last month.
"Observable movements largely occurred along an Iran-approved route nearer to the waterway’s north.
"The U.S.-supported Omani corridor was relatively quiet. The shipping industry has shown a reluctance to return to the Persian Gulf."
The renewed fighting began after Iranian armed forces launched attacks on U.S. military infrastructure across Gulf states on Thursday, following American strikes on Iran's southern coastal and eastern provinces, further weakening a fragile three-week-old ceasefire.
Iranian media also reported multiple explosions across southern Iran, including in Bushehr, home to one of the country's nuclear power plants.
The escalation coincided with the burial of Iran's slain Supreme Leader, Ayatollah Ali Khamenei, in Mashhad, bringing to a close a week of funeral processions and public rallies.
Khamenei was killed on the opening day of the conflict on 28 February.
The latest hostilities have further delayed the full reopening of the Strait of Hormuz, the strategic waterway that handled around 20% of global oil and liquefied natural gas supplies before the conflict.
Despite the renewed violence, U.S. President Donald Trump sought to reassure markets, saying on Wednesday he did not believe the conflict would return to full-scale war.
“Anything that happens is going to be over very quickly.”
Trump's comments helped temper some of the market's geopolitical concerns, although traders continued to monitor developments in the Gulf for any further disruption to global energy supplies.
