Image@ Reuters
Oil prices experienced an uptick on Friday as hostilities intensified between the United States and Iran, disrupting oil shipments through the Strait of Hormuz.
Iran has also directed the Houthi political and military group to prepare for potential closures of the Red Sea export route.
As of 0312 GMT, Brent crude futures increased by 70 cents, or approximately 0.83%, reaching $84.93 per barrel.
Similarly, U.S. West Texas Intermediate (WTI) futures rose by 81 cents, or 1.03%, to $79.76 per barrel, recovering losses from the previous trading session.
Both benchmark oil contracts have surged nearly 12% this week, with Brent on track for its third consecutive weekly increase and WTI poised for its second.
”The looming threat of the Red Sea becoming a significant disruption point for supply adds complexity to the global oil landscape,” remarked Tim Waterer, chief market analyst at KCM Trade.
He emphasized that this “dual-risk scenario” is contributing to a geopolitical premium in both benchmarks.
In a significant escalation, the U.S. conducted two substantial airstrike waves on Wednesday, targeting sites near Iran’s southern coastline for the first time since a ceasefire agreement was reached last month.
The strikes continued into Thursday.
In response, Qatar’s Defense Ministry reported that its military successfully intercepted an Iranian missile attack early Friday morning, with the interior ministry confirming that a child sustained injuries from shrapnel during interception efforts.
”Ensuring oil security remains a vital concern,” stated Fatih Birol, Executive Director of the International Energy Agency, during a Council on Foreign Relations event in Washington on Thursday.
”If conditions do not improve in the coming weeks, I will be increasingly worried.”
The U.S. Central Command announced that American forces initiated “a new series of strikes against Iran for the sixth consecutive night to further diminish Iranian military capabilities” at 2 p.m. EDT (1800 GMT), corresponding to 9:30 p.m. in Tehran.
In retaliation, Iran has launched missiles and drones targeting U.S. military installations in neighboring countries, including an assault on a recently expanded airbase in Jordan.
Further complicating supply dynamics, Iranian leadership has advised its Houthi allies to be ready to shut down the Red Sea oil route if U.S. strikes target Iranian power infrastructure, according to three sources who spoke to Reuters.
Analysts at IG noted that if WTI maintains its position above key support levels in the mid-$70s, it could potentially test the mid-$80s range.
By: Magdalene Agyeiwaa Sarpong