Oil Prices Climb as U.S.-Iran Conflict Escalates, Raising Fears Over Global Supply Routes

Reuter

Oil prices rose on Friday as escalating military tensions between the United States and Iran heightened concerns over disruptions to global energy supplies through two of the world’s most critical shipping routes—the Strait of Hormuz and the Red Sea.
Brent crude futures gained 70 cents, or 0.83%, to $84.93 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 81 cents, or 1.03%, to $79.76 a barrel. The gains erased losses from the previous session, with Brent and WTI both posting weekly increases of nearly 12%.
The latest rally follows intensified fighting between Washington and Tehran. The United States launched fresh waves of air strikes targeting sites near Iran’s southern coast, marking the sixth consecutive night of military operations. Iran responded with missile and drone attacks targeting U.S. military installations in neighboring countries, including a recently expanded air base in Jordan.
Market concerns also grew after sources told Reuters that Tehran had instructed its Houthi allies to prepare to shut the Red Sea shipping route if U.S. attacks were to target Iran’s power infrastructure. Such a move could significantly disrupt global oil shipments.
“The potential threat of the Red Sea becoming another major supply disruption point is further complicating the global oil outlook,” said Tim Waterer, Chief Market Analyst at KCM Trade. He said the combined risks in both the Strait of Hormuz and the Red Sea were keeping a strong geopolitical premium in oil prices.
Further adding to regional tensions, Qatar’s Defence Ministry said its armed forces intercepted an Iranian missile attack early Friday. The country’s Interior Ministry reported that a child was injured by shrapnel from the interception.
The International Energy Agency (IEA) also warned that global energy security remains under serious threat. Speaking at the Council on Foreign Relations in Washington, IEA Executive Director Fatih Birol said the world should be concerned if normal shipping through the Strait of Hormuz is not restored within the next few weeks.
Analysts said continued geopolitical uncertainty could push oil prices even higher. According to IG analysts, WTI crude could test the mid-$80 per barrel range if it remains above key technical support levels in the mid-$70s.