Oil Prices Rise as Middle East Tensions and Supply Concerns Keep Energy Markets Tight

BY COMFORT OGBONNA

Global oil prices climbed on Friday as escalating geopolitical tensions in the Middle East continued to weigh on energy markets, even as major economies signaled willingness to help secure key shipping routes and the United States explored measures to boost global supply.

Benchmark crude prices moved higher despite diplomatic efforts by leading European countries, Japan, and Canada to safeguard commercial shipping through the strategically vital Strait of Hormuz. The narrow waterway is one of the most important energy transit routes in the world, carrying roughly 20% of global oil and liquefied natural gas shipments. Any threat to the passage immediately raises fears of supply disruptions and sends prices higher.

Brent crude futures gained $1.20, or about 1.1%, reaching $109.85 per barrel by mid-morning trading. Meanwhile, U.S. West Texas Intermediate crude edged up slightly by 6 cents to $96.20 per barrel. The two major oil benchmarks have been moving in opposite directions for much of the week. Brent was on track for a weekly gain of nearly 7%, reflecting global supply concerns, while WTI appeared set for its first weekly decline in five weeks, slipping around 2%.

Analysts say the recent surge in oil prices reflects a tightening global energy market that could remain under pressure for some time. Ole Hansen, head of commodity strategy at Saxo Bank, noted that the market may not see a quick reversal in energy prices because production disruptions have already caused lasting damage to supply.

According to Hansen, the global oil market was already relatively tight before the latest conflict developments, and any disruptions to infrastructure or shipping routes have amplified concerns among traders and energy companies. Even if tensions ease, restoring normal supply flows could take considerable time.

The rise in prices also comes as Israel and Iran exchanged fresh military strikes on Friday, raising fears that the conflict could expand further across the region. The situation intensified following a strike that hit an oil refinery in Kuwait, adding to concerns that energy infrastructure could increasingly become a target in the broader conflict.

In response to the growing risks to energy shipping lanes, several major economies issued a joint statement pledging support for efforts to maintain safe navigation through the Strait of Hormuz. Britain, France, Germany, Italy, the Netherlands, and Japan said they were ready to contribute to coordinated international efforts aimed at protecting tanker traffic moving through the critical passage.

Securing the strait is viewed as essential for maintaining stable global oil supplies. The channel sits between Iran and Oman and serves as the primary route for crude exports from several major producers in the Persian Gulf, including Saudi Arabia, the United Arab Emirates, Iraq, and Kuwait.

At the same time, the United States is exploring policy options designed to increase available supply and calm markets. U.S. Treasury Secretary Scott Bessent indicated that Washington may consider removing sanctions on Iranian oil currently stranded aboard tankers, potentially allowing that crude to enter the global market.

Bessent also suggested that another release of oil from the U.S. Strategic Petroleum Reserve could be on the table if prices continue to surge. The strategic reserve has previously been used by Washington to ease supply shortages during periods of geopolitical disruption or economic shocks.

Oil prices briefly spiked earlier this week, with Brent crude jumping above $119 per barrel on Thursday. The surge came after Iran responded to an Israeli attack on a major gas field by striking facilities that disabled roughly 17% of Qatar’s liquefied natural gas production capacity. Experts estimate the damage could take years to fully repair, potentially tightening LNG supplies across global markets.

The attack on gas infrastructure further raised fears that the conflict could spill into broader energy facilities across the Gulf region, which holds some of the world’s largest reserves of oil and natural gas.

U.S. President Donald Trump said he had urged Israel not to repeat strikes targeting Iranian gas infrastructure, warning that attacks on major energy assets could destabilize global markets and worsen economic uncertainty. Israeli Prime Minister Benjamin Netanyahu stated that Israel carried out the strike independently and claimed Iran’s ability to enrich uranium or produce ballistic missiles had been significantly weakened.

Despite the escalation, some market analysts noted that oil prices had slightly pulled back earlier in Friday’s trading session as world leaders began emphasizing the need for restraint and diplomatic de-escalation.

Priyanka Sachdeva, a senior market analyst at Phillip Nova, said the early dip in prices reflected the partial removal of what traders call the “war premium”—the extra cost built into oil prices during periods of geopolitical tension.

However, she cautioned that markets remain extremely sensitive to developments surrounding the Strait of Hormuz. Any new disruptions to shipping or attacks on energy infrastructure could quickly push prices higher again.

Sachdeva explained that even if international negotiations succeed in guaranteeing safe passage for oil tankers through the strait, restoring full logistics and transport operations could take considerable time due to insurance concerns, shipping reroutes, and damaged facilities.

Meanwhile, there are signs that some additional supply may emerge from the United States in the coming months. In North Dakota, the country’s third-largest oil-producing state, regulators said crude production is expected to rise as operators restart previously inactive wells and seasonal winter restrictions on drilling ease.

The North Dakota Department of Mineral Resources said the increase in output will depend largely on how long current oil prices remain elevated. Higher prices typically encourage producers to expand drilling activity, though many large oil companies have already finalized their annual spending budgets.

Energy markets will continue to watch the evolving geopolitical situation closely in the coming weeks, as traders assess whether diplomatic efforts can stabilize the region or whether further disruptions will tighten already constrained global oil supplies.