On Friday, U.S. crude oil experienced its largest weekly increase in futures trading history, driven by the intensifying conflict in the Middle East which has significantly disrupted global fuel supplies.
West Texas Intermediate futures skyrocketed by 12.21%, equivalent to $9.89, closing at $90.90 per barrel. The global benchmark Brent surged 8.52%, or $7.28, to finish at $92.69 per barrel.
U.S. crude jumped 35.63%, marking the largest weekly rise in the futures contract’s history since 1983. Brent rose nearly 28%, its most significant weekly increase since April 2020.
President Donald Trump on Friday called for unconditional surrender from Iran, escalating concerns of an extended conflict that could disrupt the global oil and gas market severely. The war has already caused traffic in the Strait of Hormuz, a vital shipping route for energy supplies, to nearly halt.
Saad al-Kaabi, Qatar’s energy minister, informed The Financial Times on Friday that crude prices may reach $150 per barrel if oil tankers are unable to navigate through the Strait.
“This could devastate the global economies,” Kaabi remarked.
“We expect that everyone who has not declared force majeure will do so in the coming days if this persists,” Kaabi shared with the FT. “All exporters in the Gulf will need to declare force majeure. Failing to do so could legally expose them to liability, which is their decision.”
The Trump administration announced a $20 billion insurance program for oil tankers in the Persian Gulf on Friday, although this measure did little to stabilize the crude market.
According to two Iraqi officials who spoke to Reuters on Tuesday, Iraq has ceased production of 1.5 million barrels per day. Additionally, Kuwait has begun to cut back production after depleting its storage capacity, sources told The Wall Street Journal on Friday.
“The market is transitioning from simply pricing in geopolitical risk to addressing real operational disruptions,” stated Natasha Kaneva, head of global commodities research at JPMorgan, in a note to clients on Friday.
Production reductions could reach 6 million bpd by the end of next week if the Strait remains closed to traffic, Kaneva projected. JPMorgan anticipates supply constraints in the United Arab Emirates next week.
The average price for a gallon of regular gasoline increased by almost 27 cents over the last week through Thursday, reaching $3.25, according to data from the U.S. travel organization AAA.
The conflict between Iran and the U.S. entered its seventh day on Friday. At a press conference on Thursday, U.S. Defense Secretary Pete Hegseth stated that the U.S. had “only just begun to fight.”
“Iran believes we cannot sustain this, which is a significant miscalculation,” he told reporters.
