Crude surged 4% as expanding US-Iran conflict and Red Sea closure threats trigger supply panic

Global crude benchmarks rallied over 4% on Friday to settle at one-month highs, capping a volatile week with a massive 16% net gain as intensifying US-Iran military strikes and mounting threats to Red Sea shipping routes ignited acute supply anxieties.

The international Brent contract jumped $3.87 (4.59%) to settle at $88.10 a barrel, while US WTI rose $3.54 (4.48%) to close at $82.49.

Both benchmarks closed at their highest levels since mid-June, with Brent securing its third consecutive weekly advance and WTI its second.

The aggressive pricing premium returned after Washington and Tehran expanded direct kinetic exchanges, with US forces striking Iranian logistics infrastructure and Iran retaliating against a Kuwaiti power plant and US assets in Syria.

Supply fears escalated sharply following intelligence that Tehran is pushing Yemen's Houthi movement to close the Red Sea route. This development directly threatens Saudi Arabia's primary bypass strategy, which has seen the kingdom divert over 70% of its normal crude exports—roughly 4 million barrels per day—through the East-West Pipeline to the Red Sea port of Yanbu to avoid the already restricted Strait of Hormuz.

Global supply constraints were compounded by secondary geopolitical disruptions. Qatar's air defences thwarted an Iranian missile strike, while a fresh Ukrainian drone strike targeted a Russian refinery in the Yaroslavl region, keeping pressure on global product yields.

Written by: Aiman Haikal