Oil prices surge as Strait of Hormuz closes, sending US crude sharply higher on Friday as buyers searched for available barrels and Middle Eastern supply stayed constrained amid the expanding US-Israeli conflict with Iran.
Brent crude was up $5.42 (6.35%) at $90.83 a barrel, while West Texas Intermediate (WTI) climbed $7.81 (9.81%) to $88.96, according to the source’s pricing snapshot.
This marked the second straight day that US crude gains outpaced Brent, with analysts pointing to a rush for alternative supply. One analyst quoted in the source said refiners and trading houses are seeking substitutes, and the US, as the largest producer, has become a key option.
The same analyst said the WTI-Brent spread is moving as the market accounts for transportation costs and the risk that US inventories could be reduced too quickly if exports surge.
The rally also put crude on track for its strongest weekly gain since the extreme volatility seen during the early COVID-19 period, as shipping and energy exports through Hormuz remained halted.
Could crude reach $100 or more?
The source report says Qatar’s energy minister warned in an interview that Gulf energy producers could shut down exports within weeks, a scenario he said could push oil to $150 a barrel.
Market voices cited in the report also said forecasts of $100 oil could become reality if the disruption continues.
According to the source, oil began its steep rally after the US and Israel launched strikes on Iran last Saturday, and Tehran then stopped tankers moving through the Strait of Hormuz. The report adds that about 20% of global oil demand typically passes through the waterway each day, meaning a prolonged stoppage would quickly tighten supply.
Read: Oil Prices Surge After Iran Strikes, Brent Jumps 13% Above $82
The conflict is also described as spreading across key energy-producing areas, disrupting output and forcing shutdowns of some refineries and liquefied natural gas facilities.
The report says President Donald Trump told Reuters he was not concerned about rising US gasoline prices linked to the conflict, while a White House official signalled the Treasury Department was expected to announce measures to combat rising energy prices.
The source also reports that the Treasury granted waivers allowing companies to buy sanctioned Russian oil stored on tankers to ease supply constraints, with the first waivers going to Indian refiners. Ship-tracking estimates cited in the report suggest significant Russian oil volumes are available on vessels in the region.
