Oil falls as US, allies discuss efforts to boost supply and open Strait of Hormuz

London. Global oil prices fell over 1 percent on Friday as the US outlined moves to manage the oil supply crisis, while leading European nations, Japan and Canada offered to join efforts to secure safe passage for ships through the ‌Strait of Hormuz.

Brent futures for May fell $1.58, or 1.45 percent, to $107.07 a barrel at 1220 GMT.

US West Texas Intermediate (WTI) crude futures for April, which expire on Friday, were down $1.30, or 1.35 percent, to $94.84.

The more liquid May WTI futures contract was at $94.30 at 1220 GMT, down $1.25 or 1.31 percent.

At those levels, Brent was heading for a 3.8 percent weekly gain, while the front-month WTI was down around 3.9 percent from where it closed last Friday.

WTI's discount to Brent hit its widest in 11 years on Wednesday.

Israel and Iran traded fresh attacks on Friday, following a hit on an oil refinery ⁠in Kuwait.

On Friday, US Energy Secretary Chris Wright said removing oil sanctions on stranded waterborne Iranian cargoes would get supplies to Asia in three to four days.

He added that more oil is needed in Asia and that the US is playing a part in a coordinated release from strategic reserves. Releases will occur over the next few months, Wright said.

His comments came after US Treasury Secretary Scott Bessent said on Thursday that the US may soon remove sanctions from Iranian oil stranded on tankers, and said a further release of crude from the US Strategic Petroleum Reserve was possible.

Also on Thursday, Britain, France, Germany, ​Italy, the Netherlands and Japan expressed their "readiness to contribute to appropriate efforts to ensure safe passage through the Strait" in a joint statement.

All eyes on Hormuz

Analysts continued to view an outlook for elevated prices as long as traffic through the Strait, through which 20 percent of the world's oil and LNG transits, ‌is disrupted.

"The ⁠potential for a quick reversal in energy prices is unlikely because damage has been done to production," said Ole Hansen, the head of commodity strategy at Saxo Bank.

"The fact on the ground remains that we have a tight market."

"As long as the flow of oil through the Strait of Hormuz remains restricted, the path of least resistance for crude prices remains to upside, in my view," UBS analyst, Giovanni Staunovo said.

International Energy Agency (IEA) chief Fatih Birol warned that it could take up to six months ⁠to restore oil and gas flows from the Middle East Gulf, and that politicians and markets were underestimating the scale of disruption, he said in an interview with the Financial Times on Friday.

Further supply disruption could ​be possible as the Trump administration is considering plans to occupy or blockade Iran's Kharg Island to pressure ​Iran to reopen ⁠the Strait of Hormuz, Axios reported on Friday.

Brent jumped higher than $119 a barrel on Thursday, coming close to a March 9 peak, after Iran responded to an Israeli attack on a major gas field by knocking out 17 percent of Qatar's LNG capacity, causing damage that will take up to five years to ⁠repair.

US President ​Donald Trump said he told Israel not to repeat attacks on Iranian gas infrastructure.

Israeli Prime ​Minister Benjamin Netanyahu said his country had acted alone in the attack and Iran no longer has the capacity to enrich uranium or make ballistic missiles. (Reuters)