LONDON — Oil prices have surged to their highest levels in six weeks as renewed fighting between the United States and Iran, escalating threats against Tehran and falling shipping activity through the Strait of Hormuz intensify fears of a fresh disruption to global energy supplies.
The latest jump has put the oil market back in the spotlight, with traders closely watching whether the conflict remains contained or develops into a broader threat to crude exports from the Middle East.
Brent crude futures reached a six-week high during Thursday’s trading session after fresh US strikes on Iran and renewed Israeli threats against Tehran triggered concerns over potential disruption to regional energy supplies.
Brent later settled at US$95.52 a barrel, down slightly by 11 cents, while US West Texas Intermediate (WTI) crude settled at US$91.30, up 29 cents.
Despite the mixed settlement, both benchmarks had reached six-week highs earlier in the session.
And the rally continued to keep markets on edge Friday.
Oil heads for its biggest weekly gain since July
By Friday, oil remained elevated as investors assessed the latest US-Iran military exchanges.
Reuters reported that Brent was down around 0.5% at US$95.05 a barrel and WTI was down about 0.7% at US$90.66 in early trading.
Even with the modest retreat, Brent was still up around 6.5% for the week, while WTI had gained approximately 8.8%.
That would put both contracts on track for their strongest weekly performances in weeks.
The market’s concern is not simply the fighting itself.
It is what the fighting could do to the movement of oil.
The Strait of Hormuz is becoming the critical pressure point
One of the world’s most important oil chokepoints is now at the centre of the market’s attention.
The Strait of Hormuz connects the Persian Gulf with the Gulf of Oman and is a crucial route for oil and liquefied natural gas shipments.
Recent shipping data show that traffic through the waterway has fallen sharply.
Only four commodity vessels crossed the Strait of Hormuz on Thursday, according to Kpler data cited by Reuters. That was dramatically below the 10-day average of about 15 vessels per day.
The figure excludes vessels operating with their Automatic Identification System transponders switched off.
Earlier data cited in the original Reuters report showed only six commodity vessels crossing on Wednesday, compared with 11 the previous day and a 10-day average of roughly 13.
The decline is significant because any sustained disruption through Hormuz could place additional pressure on an already tight global oil market.
Why Hormuz matters so much
The Strait of Hormuz is one of the world’s most strategically important energy routes.
Before the current conflict, roughly 125 commercial vessels were observed crossing the waterway each day, according to Kpler data cited by Reuters.
Since the war began, observed oil export volumes have fluctuated between approximately 4 million and 6 million barrels per day, apart from a short-lived interim arrangement.
Rystad Energy economist Claudio Galimberti expects shipping activity to remain subdued through November if current conditions persist.
That is why traders are watching vessel movements almost as closely as military developments.
A major interruption to oil shipments would quickly change the market’s calculations.
Fresh US strikes reignite supply fears
The latest price spike followed new US strikes against Iranian targets.
Iran’s health minister said the Tuesday night strikes killed 18 people and injured 108, while the Iranian Red Crescent said four people were killed and 67 injured at a wedding ceremony near the Strait of Hormuz.
Three Iranian army pilots were also reported killed.
The attacks represented the most substantial exchange of fire between Washington and Tehran since July, according to Reuters reporting.
The conflict is now in its seventh month, increasing concerns that what was initially viewed by some traders as a temporary geopolitical shock could become a longer-lasting threat to energy flows.
Israel issues another warning
Adding to the pressure, Israeli Defence Minister Israel Katz again warned that Israel could target Iranian military and civilian infrastructure, including energy facilities, if Tehran attacks Israel.
Those comments immediately became another factor for oil traders to assess.
The reason is straightforward: if energy infrastructure itself becomes a target, the potential consequences for regional production, refining and exports could be far greater than those caused by isolated military exchanges.
Saxo Bank analyst Ole Hansen said Katz’s comments helped push oil prices higher.
Iran tightens pressure on shipping
Iran has also expanded its list of vessels it considers non-compliant and could subject to fines, confiscation or detention if they attempt to transit the Strait of Hormuz.
The development adds another layer of uncertainty for shipping companies and energy traders.
The fewer vessels willing or able to make the crossing, the greater the risk that crude supplies could become temporarily constrained.
However, the situation is not yet equivalent to a complete closure of the waterway.
That distinction is crucial.
Oil prices are rising because markets fear a potential supply disruption — not because global oil shipments have completely stopped.
Global inventories are providing some protection
The oil market is already relatively tight, but existing inventories have so far helped absorb some of the disruption risk.
UBS energy analyst Giovanni Staunovo said declining global inventories were translating into higher prices, while Middle East tensions were providing additional support.
The concern is that these inventory buffers may not remain sufficient if disruptions continue for an extended period.
ANZ analysts also warned that while elevated inventories initially helped absorb the supply shock, maintaining the market balance could become increasingly difficult as those stockpiles decline.
This creates a potentially dangerous feedback loop:
More fighting → fewer ships → greater supply uncertainty → higher oil prices → higher fuel costs.
But another geopolitical development is pushing prices in the opposite direction
There is another major factor preventing oil prices from rising even faster.
Russian President Vladimir Putin said Thursday that there remained a possibility of reaching an agreement to end the war in Ukraine.
He also said several countries, including the United States and China, were prepared to support a peace settlement.
Any meaningful reduction in the Russia-Ukraine conflict could ease concerns over Russian fuel supply disruptions and potentially increase available energy supplies.
That possibility has therefore provided some downward pressure on crude prices.
The result is an oil market being pulled in two different directions.
The Middle East is pushing prices higher.
Potential progress in Ukraine is pulling them lower.
For now, Middle East supply concerns are dominating.
Iraq is increasing exports
There is also some additional supply coming onto the market.
Iraq increased oil exports to approximately 2.34 million barrels per day in August, up from about 1.35 million barrels per day in July, according to Iraqi energy officials cited by Reuters.
September exports are also expected to increase.
Heavy discounts and Iranian approval for Iraqi tankers to pass through the Strait of Hormuz have encouraged buyers.
The additional Iraqi supply could help offset some of the pressure elsewhere, although traders remain focused on whether the broader regional conflict could eventually overwhelm those gains.
Fuel prices could become the next concern
The consequences of the oil rally are already extending beyond crude.
US diesel futures recently jumped to their highest level in more than four years, while refining margins have also surged.
That matters because diesel is essential for trucking, agriculture, construction, shipping and industrial activity.
If elevated crude and refined-fuel prices persist, the effects could eventually spread through transportation costs and consumer prices.
The potential impact is therefore much broader than what motorists pay at the pump.
The $100 oil question is back
With Brent trading in the mid-$90s, attention is naturally returning to the possibility of US$100 oil.
But the market has not reached that level yet.
Whether it does will depend heavily on what happens next in the Middle East.
If shipping through the Strait of Hormuz remains possible and regional production continues flowing, prices could stabilise or retreat.
If military exchanges intensify, energy infrastructure is attacked or commercial shipping through Hormuz deteriorates further, the market could face another sharp move higher.
That is why traders are watching the next military and diplomatic developments so closely.
What this means for consumers
Higher crude prices do not automatically translate into an immediate one-for-one increase in retail fuel prices.
Pump prices also depend on refining costs, taxes, currency movements, transportation expenses and local market conditions.
But sustained increases in crude prices can eventually put upward pressure on gasoline, diesel and other petroleum products.
For countries heavily dependent on imported energy, prolonged oil prices near or above current levels could create additional inflationary pressure.
The market is waiting for the next trigger
Oil’s latest rally demonstrates just how quickly geopolitical risk can return to energy markets.
The immediate trigger was renewed US-Iran fighting.
But the bigger issue is the possibility of a sustained disruption to one of the world’s most important oil shipping routes.
For now, the Strait of Hormuz remains open.
Oil continues to move.
Iraq is increasing exports.
Global inventories are still providing a cushion.
And diplomatic developments surrounding Ukraine offer another potential source of supply relief.
But shipping traffic through Hormuz has already fallen sharply, while military tensions remain high.
That leaves the oil market facing one critical question:
Will the latest escalation remain a temporary shock — or is the world heading toward a much larger energy supply crisis?
WWC ONE MEDIA J.M.D
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