Oil prices continue to climb, hitting their highest level in nearly 2 years

The price of oil continued to surge on Friday amid growing concerns that the Iran war will disrupt global crude supplies. 

West Texas Intermediate (WTI), the U.S. oil benchmark, rose 6.8% to $86.57 per barrel on Friday morning, according to data from Factset. Brent crude, the international benchmark, jumped 4.7% to $89.44. Both were trading near their highest levels since April 2024.

Tangible disruption

Crude prices have surged this week as the Iran conflict halts shipments of oil and liquefied natural gas through the strategically vital Strait of Hormuz. About 20% of global oil shipments normally travel through the waterway. 

“The market is shifting from pricing pure geopolitical risk to grappling with tangible operational disruption, as refinery shutdowns and export constraints begin to impair crude processing and regional supply flows,” JPMorgan analysts said in a report on Friday. 

Qatar’s energy minister suggested that all Gulf energy exporters may shut down production within days, which could drive Brent crude to $150 a barrel, the Financial Times reported. 

“WTI crude jumped more than 6% in response [to the FT article], briefly rising above $86 for the first time since April 2024,” Oxford Economics said in a report. “WTI crude is up close to 30% since the start of the war and up more than 55% from the January low.”

Typically, about 138 vessels travel through the Strait of Hormuz every 24 hours, but that has dropped to “single-digit levels” in recent days, according to a March 5 statement from the Joint Maritime Information Center, an international group that tracks commercial shipping safety. 

Ryan McKay, senior commodity strategist at TD Securities, said in a report that the price of Brent crude could top $100 a barrel by next week if oil tankers remain unable to traverse the Strait of Hormuz. 

Jump in gas prices

In the U.S., the spike in oil prices is leading to sharply higher fuel costs. As of Friday, the national average gas price has jumped 32 cents a gallon over the last seven days, to roughly $3.31 a gallon — the highest since August of 2024, according to GasBuddy. Diesel has soared 51 cents in a week to $4.26 a gallon, the highest since November of 2023, the tracking service found. 

Because of “the continued de facto shutdown of the Strait of Hormuz, unfortunately, price increases look to continue into this weekend at this pace,” GasBuddy petroleum analyst Patrick De Haan wrote on social media.