Investing.com– Oil prices edged lower on Friday as investors weighed a fresh escalation in the U.S.-Iran conflict against signs that crude exports through the Strait of Hormuz have yet to suffer a major disruption, tempering fears of a prolonged supply shock.

At 20:49 ET (00:49 GMT), fell 0.31% to $71.86 a barrel, while Brent Oil Futures slipped 0.30% to $76.07 a barrel.

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The latest move comes after crude surrendered part of this week’s sharp rally as traders judged that, despite renewed military exchanges between Washington and Tehran, oil flows through the Strait of Hormuz have not yet suffered a sustained disruption. Oil nevertheless remains well above last week’s levels after surging nearly 8% earlier this week on fears the conflict could escalate into a broader regional supply crisis.

Fresh strikes keep Strait of Hormuz risks in focus

The United States launched another round of airstrikes on military targets across Iran on Thursday, saying the attacks were intended to further degrade Tehran’s ability to threaten commercial shipping through the Strait of Hormuz. Iran retaliated with missile and drone attacks targeting U.S.-aligned countries including Bahrain, Kuwait, Qatar and Jordan, marking one of the broadest exchanges since last month’s interim agreement.

The latest escalation follows attacks on several commercial vessels in and around the Strait earlier this week that prompted shipping operators to delay or reconsider transits through one of the world’s busiest oil chokepoints. While tanker traffic has gradually recovered since the June agreement reopened the waterway, movements remain below pre-conflict levels as insurers and shipowners continue to assess security risks.

President Donald Trump said the latest attacks on commercial shipping effectively ended the fragile ceasefire and warned the United States would respond more forcefully if Iran targeted vessels again. At the same time, regional diplomatic efforts continued after Iranian Foreign Minister Abbas Araghchi held talks with counterparts from Saudi Arabia, Oman and Turkey, underscoring attempts to prevent the conflict from widening.

Supply outlook limits gains

ANZ said the latest escalation has rebuilt part of the geopolitical risk premium into crude prices, but noted the market has so far avoided pricing in a sustained supply shock because Gulf oil infrastructure and export facilities remain largely intact. The bank said any disruption to tanker traffic through the Strait of Hormuz, rather than the military exchanges themselves, would be the key trigger for another sharp move higher in crude.

Recent shipping data indicate tanker movements have improved from the lows seen during the height of the conflict, while reports suggest Iran has continued exporting crude despite the renewed hostilities. The market has therefore begun trimming part of the geopolitical risk premium built into prices earlier this week, although uncertainty surrounding shipping through the Strait continues to provide underlying support.

Markets are now watching whether military exchanges intensify following Thursday’s strikes, alongside developments in U.S.-Iran diplomacy, tanker movements through the Strait of Hormuz and any signs of disruption to Gulf crude exports for fresh direction.