West Texas Intermediate crude surged past $94 per barrel on Friday, climbing over 2% to reach its highest level since late May, marking a 14-week peak. The rally comes amid escalating tensions between the United States and Iran, with both nations engaging in attacks on oil tankers throughout the week. The direct threat to maritime shipping routes in critical energy corridors has sparked immediate supply concerns across global markets.
Energy traders are now pricing in significant geopolitical risk premiums as the Strait of Hormuz region faces increased instability. The attacks have reignited fears of supply disruptions in one of the world’s most vital oil transit chokepoints, through which roughly one-fifth of global petroleum passes daily. Oil-dependent economies and transportation sectors are facing immediate cost pressures, while energy equities are seeing heightened volatility.
FXnCO Insight
Traders should monitor shipping insurance rates and Middle East diplomatic developments closely, as further escalation could push WTI toward $100 per barrel within weeks, significantly impacting inflation expectations and central bank policy timelines.
Source: FXStreet