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Oil prices climbed on Friday, extending a sharp weekly rally, as escalating US-Iran military strikes heightened concerns over possible disruptions to crude shipments from the Gulf region and the Red Sea.
Brent crude futures rose $1.05, or 1.25 per cent, to $85.28 a barrel by 0118 GMT, while US West Texas Intermediate (WTI) futures gained $1.03, or 1.3 per cent, to $79.98 a barrel.
Both benchmarks have gained nearly 12 per cent this week, with Brent heading for its third consecutive weekly rise and WTI set for a second straight weekly gain.
The surge reflects growing market concerns that the conflict between Washington and Tehran could threaten key energy transit routes, particularly the Strait of Hormuz, through which around a fifth of global oil supplies pass.
US-Iran strikes revive supply concerns
Oil markets were jolted after the United States launched fresh air strikes on Iran, marking the first major escalation since a memorandum of understanding had paused fighting last month.
The US carried out two major waves of air strikes on Wednesday, largely targeting areas near Iran’s southern coast, and continued operations on Thursday.
The US Central Command said American forces had launched “a new wave of strikes against Iran for the sixth consecutive night” aimed at reducing Iranian military capabilities.
Iran responded with missile and drone attacks targeting US military facilities in neighbouring countries, including a barrage against a recently expanded air base in Jordan.
The escalation has raised fears that the conflict could widen and affect oil production, exports and shipping routes across the energy-rich Gulf.
“Oil security is still a critical issue,” International Energy Agency (IEA) Executive Director Fatih Birol said on Thursday at a Council on Foreign Relations event in Washington.
“We should be worried, and I am worried, if the situation does not improve in the next few weeks,” Birol added.
Strait of Hormuz, Red Sea in focus
The Strait of Hormuz remains the biggest vulnerability for global energy markets. Any disruption to tanker traffic through the narrow waterway could significantly affect global oil supplies and push prices higher.
Adding to supply worries, Iran’s leadership has instructed its Houthi allies to prepare to shut the Red Sea oil route if US strikes target Iranian power infrastructure, three sources told Reuters.
The Red Sea route, including the Bab el-Mandeb Strait, is a critical shipping corridor connecting the Middle East with Europe and Asia.
While no major disruption has yet occurred, traders are pricing in a higher geopolitical risk premium amid uncertainty over the next phase of the conflict.
Analysts watch for further oil gains
Analysts said crude prices could extend gains if tensions continue to escalate.
IG analysts said WTI could test the mid-$80 range if it remains above key support levels in the mid-$70 range.
However, the sustainability of the rally will depend on whether the conflict results in actual supply disruptions, rather than remaining limited to military exchanges.
Oil markets have historically reacted sharply to Middle East tensions, but prices often ease if production and shipping flows remain unaffected.
Trump-linked market data feed launched
Meanwhile, Trump Media & Technology Group has launched a paid, licensed data feed that will provide banks and trading firms faster access to posts from influential accounts on Truth Social.
The service includes updates from accounts linked to US President Donald Trump, whose comments on geopolitical issues have previously moved financial markets, including oil prices.
The launch comes as investors increasingly rely on real-time political signals and social media updates to assess risks in energy markets.
For now, traders remain focused on developments in the US-Iran conflict and whether further escalation could threaten the world’s most important oil shipping routes.
With inputs from agencies.
