Global oil prices surged on Friday, with Brent crude climbing above $90 per barrel and posting its strongest weekly performance since the early months of the COVID-19 pandemic, as escalating tensions in the Middle East rattled energy markets.
Overnight, Brent crude futures were trading near $93 per barrel, up roughly $7.6 on the day, while West Texas Intermediate (WTI) crude rose about $10.5 to $91.5 a barrel. During intraday trade, Brent briefly touched $94.5 a barrel, while WTI climbed to $92.5, marking the highest levels since August 2022.
For the week, Brent gained more than 30%, while WTI jumped nearly 38%.
Conflict Raises Supply Disruption Fears
Oil markets have remained volatile as the conflict in the Middle East entered its seventh day, with hostilities involving the United States, Israel and Iran intensifying. Missile strikes, retaliatory attacks and damage to energy infrastructure across the region have heightened fears of disruptions to global oil flows.
A key concern for traders is the Strait of Hormuz, the narrow waterway between Iran and Oman that serves as one of the world's most critical energy transit routes. Nearly one-fifth of global oil supply passes through the strait each day, making it a vital chokepoint for global energy trade.
Any prolonged disruption to shipping through the passage could sharply tighten global supplies and drive prices significantly higher. Market sentiment was further shaken after reports suggested Gulf producers could face severe export disruptions if tensions continue to escalate.
ALSO READ: Russian Crude Still Accounts For 20% Of India's Oil Imports: Govt Sources
U.S. Policy Move Eases Some Supply Concerns
Amid rising supply worries, the United States has temporarily allowed India to continue importing Russian crude for 30 days, offering a limited cushion to markets.
Russian oil still accounts for roughly 20% of India's crude imports, according to government sources. India imported about 1.04 million barrels per day from Russia in February.
The sharp rally in crude prices has revived concerns about inflation globally. Higher energy costs could ripple through transportation, manufacturing and consumer prices, complicating the outlook for central banks already navigating uncertain economic conditions.
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