Oil prices surged more than 4% on Friday, reaching their highest levels in over a month as escalating military conflict between the United States and Iran heightened concerns over global energy supplies. Brent crude rose 4.59% to settle at $88.10 per barrel, while West Texas Intermediate (WTI) gained 4.48% to finish at $82.49 per barrel. For the week, both benchmarks advanced roughly 16%, reflecting a sharp increase in geopolitical risk.
Markets reacted to expanding military strikes across the Gulf region, raising fears that oil exports from the Middle East could face further disruptions. Shipping through the Strait of Hormuz remains significantly constrained, while the possibility of additional disruptions in the Red Sea has heightened concerns over the security of two of the world’s most important energy trade routes. Together, these waterways normally handle a substantial share of global crude oil shipments.
Saudi Arabia has responded by redirecting a growing portion of its crude exports through its East-West Pipeline to the Red Sea port of Yanbu, reducing its reliance on the Strait of Hormuz. However, analysts note that any threat to Red Sea shipping would further tighten global supply chains and increase transportation costs.
With tensions continuing to escalate and attacks expanding beyond Iran and the Gulf, energy markets remain highly sensitive to geopolitical developments, keeping a significant risk premium embedded in crude oil prices.