Oil rises as traders assess shipping flows; big monthly gain in sight

In the United States, crude oil output fell about 2% in May from a record in April, while exports hit a record high for the second-consecutive month, according to data published by the EIA on Friday. Higher oil prices, however, dented consumption, with demand for crude oil and petroleum products falling more than 3.5% in May to about 20.07 million barrels per day, the lowest since March 2025, the data showed. A report from Baker Hughes on Friday showed that U.S. energy firms this week added rigs for a sixth time in seven weeks. The number of active rigs acts as an early indicator of future output. Separately, a Reuters survey of 31 economists and analysts showed that oil prices are expected to rise further this year. Brent crude is estimated to average $85.22 a barrel in 2026, up from June's forecast of $84.50, the survey showed. Oil prices rose more than $1 on Friday and were on track for a big monthly gain as reports that some tankers were forced to turn around in the Strait of Hormuz prompted traders to reassess shipping flows through the key waterway. Brent futures were up $1.01, or 1.1%, at $90.04 a barrel at 1:26 p.m. ET (1726 GMT). U.S. West Texas Intermediate crude was up $1.28, or 1.5%, at $84.87 a barrel. For July, Brent and WTI were on track to finish up 24%, their highest one-month gain since March. Iran's Revolutionary Guards stopped two tankers from transiting the Strait of Hormuz, while four others changed course, Fars News Agency reported. However, two very large crude carriers carrying oil loaded from the Gulf exited the strait on Friday, although traffic through the waterway remained sparse, according to Kpler ship-tracking data. Twenty-nine commodity vessels passed through the Bab el-Mandeb Strait on Thursday. "The market has stopped trading the war and started trading the shipping data," said Ole Hvalbye, market analyst at SEB Research. Talks between Iran and Oman on managing the strait continue, according to the Iranian Labour News Agency, despite Iran rejecting Oman's proposal for joint management of the waterway. A drone strike that sparked fires on two gas vessels in Egypt's Mediterranean port of Damietta has raised a new threat to shipping through the Suez Canal, one of the last major export routes available to Saudi oil amid the expanding Iran war. Saudi Arabia this week said it is seeking to lead a coalition to boost defence cooperation in the Bab el-Mandeb Strait, the Red Sea and the Gulf of Aden. Elsewhere, Ukraine's military said it hit Russia's Volgograd oil refinery overnight on Friday, causing a fire at the facility. In Kazakhstan, Tengizchevroil, the operator of the giant Tengiz field, has resumed oil exports via the Georgian port of Batumi for the first time since March, two sources told Reuters. The Iran war that began on February 28 has sharply reduced traffic through the Strait of Hormuz, which previously carried about a fifth of global crude oil and natural gas supplies, disrupting Middle East output running into millions of barrels a day. Back-and-forth attacks in recent days have ended a brief pause in the fighting between the United States and Iran. Additionally, Houthi militia forces in Yemen have disrupted shipping through the Bab el-Mandeb Strait linking the Red Sea to the Gulf of Aden, creating a second chokepoint for oil flows. "Fresh U.S. strikes on Iranian military targets keep the geopolitical risk premium firmly in place near chokepoints like the Strait of Hormuz. Domestic supply is reinforcing the move as well, with U.S. crude stockpiles ... down to multi-year lows," research firm Gelber & Associates wrote in a note. The note was referring to U.S. Energy Information Administration (EIA) data showing that U.S. commercial crude stocks last week fell to their lowest levels since 2018.

Oil rises as traders assess shipping flows; big monthly gain in sight

U.S. output, demand and forecasts

Oil prices rise on shipping flow concerns

Shipping activity, regional tensions and U.S. supply trends

Geopolitical risks and supply data keep focus on chokepoints

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