Oil prices rose on Friday and both major benchmarks are on track to end the week at over $100 a barrel for the first time since mid-May, as increasing attacks along key shipping routes in the Middle East fuel fears of a prolonged disruption to supplies.
Brent crude futures rose $1.05, or 1%, to $108.68 a barrel by 0045 GMT. US West Texas Intermediate crude rose 95 cents, also 1%, to $103.45 a barrel. Both benchmarks rose over 6% on Thursday.
On a weekly basis, the benchmarks were trading nearly 13% higher – the steepest gain since the week ended July 17.
Iran-aligned Houthis seized control of Yemen’s port of Mocha on Thursday, posing a further threat to Red Sea traffic, while Gulf traffic remains restricted through the Strait of Hormuz as tanker attacks in the region have intensified in recent days.
Attacks from Yemen on Saudi energy facilities marked an escalation beyond Iran and the Strait of Hormuz, and raised fears of prolonged disruptions in the broader region, analysts say.
US President Donald Trump warned the US may hit Iran’s Pickaxe Mountain, located near its heavily damaged Natanz uranium enrichment facility, and said the war would end after the November midterm elections.
“With events spiralling and Iran showing it is willing to stretch this conflict as wide and as long as it can, it is becoming increasingly likely that WTI crude will retest the $119.48 high from early March,” IG analyst Tony Sycamore said.
Iran said it had attacked 10 ships near the strait on Wednesday, after the US hit five Iranian oil tankers. Iran’s Islamic Revolutionary Guard Corps said it would escalate its response to any further attacks.
The US national average price of diesel surpassed $6 a gallon for the first time ever on Thursday, according to price tracker GasBuddy, as the US-Iran war and Ukrainian attacks on Russia’s refineries have squeezed supply.
Analysts said the rally’s durability will hinge on China, the world’s largest crude importer. If China continues to buy, it could amplify the impact of supply disruptions and drive prices higher.
OPEC lowered its forecast for world oil demand growth in 2026 to 380,000 barrels per day, a copy of its monthly report showed, marking the fifth straight downward revision. OPEC oil output fell by 640,000 bpd in August, a Reuters survey found.
