The two major crude oil grades jumped 3 per cent on Friday and settled at their highest in nearly four years, with Brent futures up by $3.54 or 3.26 per cent to $112.19 a barrel, the highest since July 2022, while the US West Texas Intermediate (WTI) crude futures appreciated by $2.18 or 2.27 per cent to $98.32 per barrel.
Prices continued to be influenced by the crisis in the Middle East as Iraq declared force majeure on all oilfields developed by foreign oil firms.
The Iran war has escalated with the US set to deploy thousands of additional Marines and sailors to the crisis-hit region.
The continued extension shows there are no signs of abating with attacks on key energy infrastructure in Iran and strikes by that nation on its neighbours, including Saudi Arabia, Qatar and Kuwait.
The oil market is starting to build in expectations of longer supply shut-ins following attacks, and several weeks before the crucial Strait of Hormuz is reopened.
Analysts said prices will remain elevated as long as traffic through the Strait of Hormuz is disrupted and likely even after. Around 20 per cent of the world’s oil and Liquified Natural Gas (LNG) transits through the strait.
US President Donald Trump claimed there are no leaders left in Iran to talk to about the war as military strikes continue to target Iranian officials. He also reiterated demands that Iran have no nuclear weapons.
Israel and Iran traded fresh attacks on Friday, following a hit on an oil refinery in Kuwait.
To help ease worries, the US said removing oil sanctions on stranded waterborne Iranian cargoes would get supplies to Asia in three to four days. With the closure of the Strait, it is difficult to get supplies to Asia from the Middle East.
The US government also said further release of crude from the Strategic Petroleum Reserve was possible. It is part of the nations that are releasing 400 million in stockpiled fuels to ease crisis woes.
It was reported that the Trump administration is considering plans to occupy or blockade Iran’s Kharg Island to pressure Iran to reopen the Strait of Hormuz.
Meanwhile, Russia attacked Ukrainian oil and gas facilities in Poltava and Sumy regions, adding to geopolitical worries.
Data from energy services firm Baker Hughes said US energy firms increased the oil rig count by two to 414 this week, the highest since mid-December.