Oil prices climbed on Friday, with Brent crude approaching $117 a barrel and moving close to levels reached during the Iran war, as escalating Middle East tensions heightened concerns over potential disruptions to global energy supplies.
Brent crude futures rose 2.8 percent to $116.93 a barrel, putting the international benchmark on track for a weekly gain of more than 5 percent. US West Texas Intermediate (WTI) crude futures advanced 3 percent to $102.46 a barrel, leaving the American benchmark poised for a weekly increase of more than 1 percent.
The rally reflects growing concern that a renewed escalation of hostilities in the Persian Gulf could undermine oil flows from one of the world’s most important energy-producing regions, even as recent shipping data suggest exports have remained resilient.
“The rally is being driven less by current fundamentals than by mounting supply concerns,” analysts at ING said in a note. Markets are increasingly worried that renewed conflict could threaten oil shipments that have so far held up despite the war.
The prospect of fresh US and Israeli strikes on Iran has added to market anxiety. News reports indicated that Washington and Tel Aviv were considering plans for renewed attacks following the US midterm elections in November.
Security risks have also widened beyond Iran. Houthi militants in Yemen have continued attacks on sites in Saudi Arabia, while Saudi Aramco, the kingdom’s state-owned oil giant, ordered the evacuation of its headquarters in Dhahran on Thursday, near Bahrain.
The developments have raised questions about whether the recent recovery in oil shipments from the Gulf can be sustained if the conflict intensifies.
Earlier in the week, the Wall Street Journal, citing shipping data, reported that more oil was moving out of the Gulf than before the United States and Israel launched their joint assault on Iran in late February. The resilience of those flows has offered some reassurance to markets, but traders are increasingly focused on the possibility that renewed attacks could disrupt production, shipping routes or export infrastructure.
Supply concerns are not confined to the Gulf. In Libya, an oil pipeline valve connecting the Hamada and Tahara oilfields to the Zawiya export port has been shut, reducing output at both fields, Reuters reported, citing the head of the National Oil Corporation.
The Libyan disruption adds another source of uncertainty to a market already sensitive to geopolitical developments. While the scale and duration of the production losses will determine their ultimate impact, further interruptions could compound the effects of any deterioration in Middle Eastern supply conditions.
With Brent nearing $117 a barrel, markets are increasingly pricing in the possibility that a conflict already reshaping energy trade could yet produce a more severe supply shock.
