Oil prices surge as US-Iran tensions raise fears of Middle East supply disruptions

Vienna (TIP): Global oil prices extended their rally on Friday as escalating military tensions between the United States and Iran heightened concerns over potential disruptions to crude supplies from the Middle East, pushing benchmark prices towards their strongest weekly gains in nearly three months.
At around 7 a.m. IST, Brent crude futures climbed $1.11, or 1.32%, to $85.34 per barrel, while US West Texas Intermediate (WTI) crude rose $1.13, or 1.43%, to $80.08 per barrel.
The latest gains reflect growing unease in energy markets after the worsening geopolitical standoff between Washington and Tehran, prompting traders to factor in the possibility of supply interruptions from one of the world’s most critical oil-producing regions.
The Middle East accounts for nearly a third of global crude production, and any escalation involving Iran raises concerns over the security of oil shipments through the Strait of Hormuz, a strategic waterway that handles roughly one-fifth of global oil trade. Any disruption in the passage could significantly tighten global supplies and drive prices even higher.
Analysts said the market is increasingly pricing in a geopolitical risk premium as investors monitor developments closely. Although oil production has not yet been directly affected, fears of retaliatory attacks, sanctions, or disruptions to shipping routes have encouraged speculative buying.
The surge in crude prices comes after several weeks of relatively stable trading, with both Brent and WTI now on course for their biggest weekly advances since April. The rally has also been supported by expectations of stronger seasonal fuel demand and signs of improving consumption in major economies.
Higher crude prices could have far-reaching implications for importing nations such as India, where expensive oil raises the country’s import bill, fuels inflationary pressures and increases costs for transport and manufacturing sectors. India imports more than 85% of its crude oil requirements, making it particularly vulnerable to prolonged spikes in international energy prices.
Market participants will now closely watch further diplomatic and military developments between the United States and Iran, along with any official statements from major oil producers, for indications of whether the current supply risks could translate into actual disruptions in global crude flows.