- Brent set for 5% weekly gain, WTI set for 4% rise
- Tanker traffic through Strait of Hormuz at a near-standstill
- IEA says U.S.-Iran escalation undermines oil surplus forecast
LONDON, July 10 (Reuters) - Oil prices eased on Friday but remained on track for weekly gains as renewed U.S.-Iran fighting disrupted shipping in the Strait of Hormuz, stoking concerns over supply disruptions.
Brent futures were down 19 cents, or 0.3%, at $76.11 a barrel by 1007 GMT. U.S. West Texas Intermediate (WTI) crude dropped 21 cents, or 0.3%, to $71.87.
For the week, Brent was set for a gain of about 6% and WTI was on track for an increase of about 5%.
"Prices have backed off the midweek highs, but there is still a substantial risk premium as Hormuz transits are back to a near-standstill with no clear signs of when normal reopening might resume," said Vandana Hari at oil market analysis provider Vanda Insights.
Iranian armed forces launched attacks on U.S. military infrastructure in Gulf states on Thursday after U.S. strikes on Iran's southern coastal and eastern provinces, further straining a creaking ceasefire.
Separately, Iranian media reported multiple explosions across southern Iran. The area included Bushehr, where one of the country's nuclear plants is located.
The recent escalation in hostilities between the U.S. and Iran could upend the International Energy Agency's forecast of a significant oil market surplus next year, it said on Friday.
The developments also have delayed a full reopening of the Strait of Hormuz, which carried about 20% of daily global oil and gas supplies before the start of the war on February 28.
The lack of any new U.S. strikes on Iran overnight is probably weighing on oil prices, though a drop in flows through the Strait of Hormuz is limiting the downside, said UBS analyst Giovanni Staunovo.
Tanker traffic through the strait was at a near-standstill on Thursday, ship-tracking data showed, as vessel owners assessed the risk after Iran hit a Qatari LNG ship exiting the waterway near Oman to trigger the latest strikes.
U.S. President Donald Trump said this week that he did not think the war would restart and that "anything that happens is going to be over very quickly".
"Despite the U.S. ramping up attacks on military sites in Iran, the market drew some reassurance from the Trump administration’s decision to avoid targeting Iranian energy infrastructure," said ANZ commodity strategist Daniel Hynes.
Reporting by Stephanie Kelly in London, Mohi Narayan in New Delhi and Nicole Jao in New York Editing by David Goodman
Source: Reuters