US crude oil futures climbed more than US$10 on Friday, with buyers seeking available barrels as Middle Eastern supply is constrained by the effective closure of the Strait of Hormuz amid the expanding US-Israeli war with Iran.
Analysts note that refiners and trading houses are searching for alternative barrels, with the US being the largest producer. This dynamic is driving the spread back to transportation costs to prevent rapid inventory depletion through high exports.
Crude oil is on track for its strongest weekly gain since spring 2020, as the Middle East conflict halts shipping and energy exports through the vital Strait of Hormuz. Qatar's energy minister anticipates Gulf energy producers could shut down exports within weeks, potentially driving oil to US$150 a barrel. Experts warn that forecasts of US$100 a barrel are likely to materialize.
The market began its steep rally after strikes on Iran led to Tehran stopping tankers through the Strait of Hormuz. Approximately 20% of daily global oil demand typically passes through this waterway. With the Strait closed for seven days, about 140 million barrels of oil have been unable to reach the market. The conflict has disrupted output across key energy-producing regions, forcing shutdowns of refineries and LNG plants.
US President Donald Trump stated he is not concerned about rising US gasoline prices linked to the conflict. While a potential intervention by the US Treasury Department briefly lowered prices, reports indicated the administration ruled out using the Treasury to trade oil futures. The Treasury had previously granted waivers for companies to buy sanctioned Russian oil.