Oil Prices Surge Amid Iran Conflict as Strait of Hormuz Disruptions Threaten Global Energy Supply

Global oil prices continued their dramatic ascent on Friday as escalating fears over the Iran war threatened to severely disrupt the flow of crude through one of the world's most critical maritime passages. West Texas Intermediate (WTI), the benchmark for U.S. crude oil, surged 6.8% to $86.57 per barrel Friday morning, while Brent crude, the international benchmark, climbed 4.7% to reach $89.44 per barrel, with both benchmarks trading near their highest levels since April 2024, according to data from Factset.

The dramatic price increases come as the ongoing Iran conflict has effectively halted shipments of oil and liquefied natural gas through the Strait of Hormuz, the strategically vital waterway through which approximately 20% of the world's oil supply normally transits. Typically, around 138 vessels pass through the strait every 24 hours, but that figure has plummeted to single-digit levels in recent days, according to a statement from the Joint Maritime Information Center, an international body that monitors commercial shipping safety.

Analysts at JPMorgan warned in a Friday report that markets are no longer simply pricing in geopolitical risk, but are now contending with tangible operational disruptions. "Refinery shutdowns and export constraints are beginning to impair crude processing and regional supply flows," the analysts noted. Qatar's energy minister has suggested that all Gulf energy exporters could shut down production within days, a scenario that analysts warn could propel Brent crude prices to $150 per barrel.

Oxford Economics highlighted that WTI crude has surged nearly 30% since the start of the conflict and more than 55% from its January low. Ryan McKay, senior commodity strategist at TD Securities, cautioned that Brent could breach $100 per barrel as early as next week if tanker traffic through the strait remains paralyzed.

American consumers are already feeling the impact at the pump. The national average gasoline price has jumped 32 cents per gallon over the past seven days to approximately $3.31 per gallon — the highest since August 2024 — while diesel prices have soared 51 cents in a week to $4.26 per gallon, the highest since November 2023, according to GasBuddy. Petroleum analyst Patrick De Haan warned that price increases are likely to continue through the weekend as long as the Strait of Hormuz remains effectively shut down.