Global crude benchmarks surged toward their largest weekly gains since July, driven by renewed fighting between the United States and Iran that curtailed shipping through the Strait of Hormuz. Energy markets reacted to tightening supplies, renewed regional military strikes, and tougher US sanctions threats, pushing Brent and West Texas Intermediate higher.
Strait of Hormuz Supply Disruptions and Weekly Price Surges
Crude prices headed for substantial weekly gains as renewed hostilities in the Middle East halted normal transit through the vital Strait of Hormuz. West Texas Intermediate rose toward US$92 a barrel, and was up more than 9% for the week, while Brent settled below US$96 in the previous session. Additional spot assessments showed Brent futures trading at US$76.34 a barrel by 0319 GMT with WTI at US$72.15, reflecting volatility as traders weighed ongoing geopolitical risks against fluctuating tanker movements.
Before the conflict escalated, the Strait of Hormuz handled approximately 20% of daily global oil and liquefied natural gas supplies. Ship-tracking data from Kpler revealed that seven commodity vessels moved through the waterway on Thursday, dropping to about half the volume recorded just one day prior. Tanker traffic dropped to a near standstill as vessel owners assessed the risks of navigating the corridor after initial strikes.
Market analysts noted that the risk premium remains elevated despite prices easing back from mid-week highs.
Military Escalation and Diplomatic Stances
The latest market turbulence followed a series of military exchanges that strained a three-week-old ceasefire. Iranian armed forces launched attacks on US military infrastructure in Gulf states following US strikes on Iran’s southern coastal and eastern provinces. Iranian media reported multiple explosions across southern Iran, including Bushehr, the site of a nuclear plant. The fighting coincided with the burial of Iran’s slain supreme leader, Ayatollah Ali Khamenei, who was killed on the first day of the war on Feb 28.
Regional actors also responded to the flare-up. Iranian forces fired missiles at Jordan, Kuwait, and Bahrain, while Israel indicated it was prepared to resume fighting if necessary. Amid the wider theater, Ukraine’s military reported striking Russia’s TANECO refinery in the Tatarstan region and the Tamanneftegaz oil terminal in the Krasnodar region, adding further supply-side pressures to global energy markets.
Political leaders offered diverging views on the severity of the conflict. Vice President JD Vance downplayed the scope, stating he would not describe it as a war because major combat operations concluded several weeks earlier.
Sanctions Pressure and Producer Output Strategy
Energy pricing found additional support from Washington’s hardline stance on Tehran. US Treasury chief Scott Bessent announced that Washington would impose the toughest sanctions in history on Iran, indicating that these measures could reduce the necessity for further major military action.
Complementing the pressure from sanctions, major producers including Saudi Arabia, Iraq, the United Arab Emirates, and Kuwait maintained strict supply restraint. Saudi Arabia notably kept its flagship crude prices unchanged for the upcoming month, signaling to markets that while regional flows remain restricted, overall regional supply tightness may be stabilizing.
At the same time, market confidence in a diplomatic resolution helped cap extreme upward momentum. President Donald Trump reinforced this sentiment by stating that anything that happens is going to be over very quickly
and noting that he did not expect a return to full-scale conflict, sentiments echoed by ANZ senior commodity strategist Daniel Hynes regarding the administration’s decision to avoid targeting Iranian energy infrastructure directly.
