Global oil markets recorded an extraordinary surge as intensifying conflict across the Middle East severely disrupted supply routes and sparked fears of prolonged instability across energy-producing regions.
U.S. crude futures climbed sharply to end the week at levels not seen since earlier market crises, reflecting both operational disruption and mounting geopolitical uncertainty across vital export corridors.
West Texas Intermediate futures surged 12.21%, or $9.89, to close at $90.90 per barrel, while the global Brent benchmark rallied 8.52%, or $7.28, settling at $92.69 per barrel.
The dramatic moves capped an unprecedented week in which U.S. crude soared 35.63%, marking the largest weekly gain in the contract’s history since futures trading began in 1983.
Brent Crude also experienced a powerful rally, jumping roughly 28% during the same period for its strongest weekly increase since the extreme volatility seen during April 2020.
Strait Of Hormuz Disruption Drives Supply Fears
The central driver behind the sudden price surge is the severe disruption to shipping activity through the Strait of Hormuz, one of the most strategically important energy corridors in the world.
This narrow waterway serves as a critical route for oil exports from major Gulf producers, meaning even temporary disruptions can send shockwaves through global supply chains.
Ongoing military activity in the region has brought tanker traffic close to a halt, creating fears that crude shipments from several Gulf exporters could face immediate logistical constraints.
Industry analysts now warn that supply losses could escalate rapidly if maritime traffic fails to resume normal operations within the coming days.
Natasha Kaneva, head of global commodities research at JPMorgan, explained that markets are no longer reacting purely to political risk but instead to real disruptions affecting production and exports.
“The market is shifting from pricing pure geopolitical risk to grappling with tangible operational disruption,” Kaneva told clients in a Friday note.
She warned that production outages could reach as much as six million barrels per day by next week if tanker traffic through the strait remains blocked.
Producers Begin Cutting Output As Storage Fills
Energy producers across the Gulf region have already begun scaling back production as logistical challenges and storage limitations complicate the movement of crude supplies.
Two Iraqi officials told Reuters that Iraq has halted approximately 1.5 million barrels per day of output as the country struggles to move oil exports through constrained shipping routes.
Kuwait has also begun trimming production levels after storage facilities filled rapidly, according to individuals familiar with the situation cited in reporting earlier this week.
Analysts expect the United Arab Emirates may soon experience similar constraints as export capacity tightens and tankers remain unable to pass through regional waterways safely.
Such disruptions could quickly escalate into a broader supply shock affecting markets across Europe, Asia, and North America.
Gulf Officials Warn Of Severe Economic Consequences
Energy leaders in the Gulf have warned that prolonged disruption to shipping through the Strait of Hormuz could have catastrophic consequences for global energy markets and economic stability.
Qatar’s energy minister, Saad al-Kaabi, said crude prices could surge dramatically if oil tankers remain unable to move through the vital shipping route.
This could “bring down the economies of the world,” Kaabi said.
“Everybody that has not called for force majeure we expect will do so in the next few days that this continues,” Kaabi told the FT.
“All exporters in the Gulf region will have to call force majeure. If they don’t, they are at some point going to pay the liability for that legally, and that’s their choice.”
Escalating Conflict Raises Risk Of Prolonged Energy Crisis
The surge in oil prices coincides with intensifying rhetoric and military escalation between the United States and Iran, raising fears that the conflict could extend far beyond its initial stages.
President Donald Trump demanded unconditional surrender from Iran, a move widely interpreted by analysts as increasing the likelihood of a prolonged confrontation affecting regional stability.
Meanwhile, the U.S. government announced a $20 billion insurance program designed to support oil tanker operations within the Persian Gulf, though the measure failed to calm volatile energy markets.
Military officials have signaled that the campaign is still expanding, further reinforcing fears that energy infrastructure and shipping routes may remain under threat.
“Iran is hoping that we cannot sustain this, which is a really bad miscalculation,” U.S. Defense Secretary Pete Hegseth said during a press conference discussing the ongoing military operations.
Rising fuel prices have already begun affecting consumers, with average U.S. gasoline costs increasing by nearly 27 cents per gallon within just one week according to travel organization AAA.