Oil Prices Rise Nearly 12% This Week As US-Iran Conflict Raises Supply Concerns

Global oil prices extended their upward movement on Friday as renewed US-Iran military tensions heightened fears of possible disruptions to crude supplies from key energy transit routes.

Brent crude futures rose 1.25% to over $85.28 a barrel, while US West Texas Intermediate (WTI) futures gained 1.3% to $79.98 a barrel.

Both benchmarks have recorded strong weekly gains, with Brent advancing nearly 12% during the week and heading towards its third consecutive weekly rise. WTI was also set for its second straight weekly gain.

The rally has been driven by concerns that the escalating conflict between Washington and Tehran could affect global oil flows, especially through the Strait of Hormuz.

The narrow waterway is one of the world’s most important energy routes, carrying nearly one-fifth of global oil supplies.

Oil markets reacted sharply after the United States launched fresh air strikes against Iran, marking the biggest escalation since a temporary pause in hostilities last month.

US forces carried out multiple rounds of strikes targeting areas near Iran’s southern coast, while operations continued for several days.

Iran responded with missile and drone attacks on US military facilities in neighbouring countries, including strikes on a major air base in Jordan.

The developments have increased concerns that the conflict could expand further and impact crude production, exports and shipping activity across the energy-rich Gulf region.

International Energy Agency (IEA) Executive Director Fatih Birol warned that energy security remains a major concern amid the rising tensions.

He said markets should remain cautious if the situation does not improve in the coming weeks.

The Strait of Hormuz remains the biggest risk factor for oil markets.

Any restrictions on tanker movement through the waterway could create significant supply challenges and push prices higher.

Additional concerns emerged over the Red Sea shipping route after reports suggested Iran had asked its Houthi allies to prepare for possible action against the route if US strikes target Iranian power infrastructure.

The Red Sea, including the Bab el-Mandeb Strait, is a crucial trade corridor connecting the Middle East with Europe and Asia.

Although no major disruption has occurred so far, traders have increased the geopolitical risk premium on crude prices amid uncertainty over future developments.