The volatility erupted following an escalation between U.S. and Iranian forces. A sequence of targeted American airstrikes near Iran’s southern coast triggered retaliatory missile and drone attacks on U.S. positions, shattering the relative calm that had pressured prices downward over the previous fortnight. With roughly one-fifth of the world’s seaborne oil transiting the Strait of Hormuz, Iran’s threats to disrupt shipping lanes and the involvement of Houthi allies in the Red Sea have turned supply security into the primary market driver.
Geopolitical Flare-ups Drive Crude to Sharpest Weekly Gains
Crude oil prices surged by more than 11% this week, marking a dramatic reversal as traders scrambled to price in renewed military hostility in the Middle East. After hovering near $72.50, WTI benchmarks breached the $80 threshold, underscoring a market shift from supply-side optimism to acute geopolitical anxiety.
Supporting this bullish momentum, fresh inventory data from the Energy Information Administration provided a structural floor for the price surge. As fears of regional blockage intensify, the market is shedding its previous focus on flow improvements, replacing it with a risk premium that accounts for the potential of paralyzed energy exports from the Persian Gulf.
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